April is tax season, a time to celebrate ourselves as taxpayers of America and Hawaii who make collective contributions to the benefit of all.
In fact, it’s hard to imagine life without the things our tax payments support, such as ensuring that the elderly and poor have food, housing, and health care; that children get a good free education; and that our very lives are defended by the military, public health agencies, scientific research and environmental protections.
Research shows that most of us are proud to do our civic duty on tax day. In fact, according to the Pew Research Center, our top concern about taxes is that the wealthy and corporations aren’t paying their fair share. In other words, we understand the value of taxes in building the world we want to live in and are proud to pay.
But we also understand that powerful interests have skewed the tax code in their favor and we feel the need to right this wrong.
Unfortunately, the recently passed federal tax bill is the opposite of what most Americans want, as it delivers windfall gains to wealthy households and profitable corporation, further widening the gap between those at the top and the rest of us.
For the wealthy, it slashes income taxes, exempts estates worth less than $22 million per couple ($11 million per individual) from taxes, creates a new tax cut on pass-through income earned largely by the rich, and cuts corporate taxes.
But it gets worse. The hastily drafted law will shrink federal revenues by $1.5 trillion over the next decade, fueling likely funding cuts for Social Security, Medicare, and Medicaid just as our aging population demands increases; and has created new loopholes for wealthy taxpayers and corporations to exploit, as a new analysis from the Center on Budget & Policy Priorities shows.
Evidence of the federal law’s lop-sided impact is clear: Hawaii’s poorest residents — those earning $25,000 a year or less — will pocket an annual tax cut of $110 while the richest 1 percent — those with an annual incomes over $489,599 — will be keeping a whopping $33,370 more in 2018. That big tax break for the wealthy is 39 times more than the one that goes to median wage earners, those making between $43,100 and $64,800 a year.
Offsetting The Harm
Fortunately, the people of Hawaii can work together to offset some of the harm by creating a fairer state tax code. The Hawaii Tax Fairness Coalition, made up of 23 well-respected organizations whose efforts make Hawaii a better place, is urging the Legislature to pass:
- House Bill 2703, which would allocate a portion of conveyance taxes to a rental assistance fund, increase the income tax credit for low-income renters, and make Hawaii’s earned income tax credit refundable.
- House Bill 2672, which expands the low-income renters’ income tax credit and matches adjusted gross income status to the federal definition.
- House Bill 207, which increases estate taxes on net estates of $10 million or more, and raises conveyance taxes on investment properties valued at $2 million and up.
- Senate Bill 2989, which expands eligibility and availability for the income tax credit for low-income renters and automatically adjusts it for inflation in the future. (The bill also seeks to reduce homelessness by appropriating funds to a new homeless children rental assistance program.)
This April, we should all pay with pride for the things that make our communities great — and ask our legislators to support tax fairness.
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The post Here’s Why We Should Love Paying Our Taxes appeared first on Honolulu Civil Beat.