Taxes

Closing budget deficits is not always the optimal fiscal policy in the short term  or the medium term. Instead, budgets should simply be seen as a tool with which to boost living standards. Sometimes policy needs to move the budget toward a deficit to achieve this; at other times, the budget needs to be moved closer to a balance or surplus.

Reducing budget deficits is too often presented as a key budgetary challenge. Defining fiscal policy this way in the present economic environment, however, is simply bad economic analysis. Instead, the most pressing economic task should be viewed as finally securing a durable return to genuine full employment.

Publications

Hawai‘i Budget Primer: An Overview of How Hawai‘i Invests in Our Future and Our People

Hawai‘i has a new resource to help make better budget and tax policy decisions, coming online at a critical time in light of recent and upcoming events in Washington.

The Hawai‘i Budget Primer serves as a starting point for a new effort to pull together data and information relating to the budget so policy makers, community leaders, and interested citizens can make better informed budget and policy decisions.

Takeaways from the Budget Primer include the following:

  • Hawai‘i is last in the nation in terms of percentage of our state budget that comes from federal sources, suggesting that Hawai‘i may have an opportunity to attract more federal dollars to support state programs.
  • State government spending accounts for 20 percent of the gross state product (GSP). In combination with county budgets, 26 percent of the GSP comes from Hawai‘i-based government.
  • Hawai‘i residents with the lowest incomes pay almost twice as much of their earnings to state taxes than people with the highest incomes.
  • The state’s biggest source of tax revenue is the general excise tax. The GET appears to be deceptively modest (4 to 4.5 percent) if seen as a sales tax but, because it’s an excise tax applied to virtually every transaction, the multiplied effect would equal a sales tax of 10 to 11 percent.
  • Hawai‘i’s property taxes, which are collected at the county level only, are at the lowest rates in the country.

U.S. tax law is a boon to the affluent

A new analysis of the tax law Congress passed last December shows that it will shower benefits on the most affluent Ohioans – and that making its temporary provisions permanent will add to their gains, while providing much more modest savings for most residents.

Seattle taxes ranked most unfair in Washington — a state among the harshest on the poor nationwide

A new report finds that even in Washington — a state whose tax system has been called the nation’s most unfair to the poor — Seattle manages to stand out from the pack.

The report, published this week by the Seattle-based Economic Opportunity Institute (EOI), a liberal think tank, evaluated the tax burdens for households at various income levels in 15 Washington cities. Among those cities, the report found Seattle’s taxes to be the most regressive — in other words, hard on the poor and easy on the rich.

Who Really Pays: An analysis of the tax structures in 15 cities throughout Washington State

Many Washingtonians feel they are heavily taxed. They are – if they’re working class or middle class. Wealthy residents pay a tax rate many times lower than the rates other people pay. But due to our opaque tax system, it’s hard to understand how much we pay in taxes, or how much other people are.

This report compares the tax obligations of households at the $25,000, $50,000, $75,000, $100,000, $150,000 and $250,000 income levels in Bellevue, Bellingham, Everett, Federal Way, Kent, Olympia, Pasco, Pullman, Renton, Seattle, Spokane, Tacoma, Vancouver, Wenatchee and Yakima. In Seattle, the combination of state and local taxes results in a system which relies much more heavily on taxes on the people least able to pay, while not imposing significantly higher taxes on the wealthy.

This report also compares job growth in states and cities with their income tax structures and effective tax rates on wealthy households. In neither case is there any correlation.