So, who do you think pays the most in state taxes in the US? New Yorkers? That would have been my guess, simply based on how legendarily expensive it is. (Not to mention how bad a beating my wallet takes every time I go there. Ok, technically speaking, the nice restaurants shouldn’t count as a New York tax–it’s really more of a tax on me for not living in NYC.) So then, if not New York, maybe Massachusetts? Don’t they call it “The People’s Republic of Massachusetts”? If a strong tradition of Northeastern liberalism doesn’t result in a hefty tax bill, then nothing will.
Yes, New York and Massachusetts both make the top 5. But for a sheer, soul-crushing, burdensome tax scheme, no other state can beat Hawaii. That’s right. We’re #1! We’re #1! I quote the San Francisco Chronicle’s recent article on the states with the greatest individual tax burden on their residents:
The Aloha State may be renowned as one of the most beautiful states in the Union, but that beauty comes at significant cost: the average Hawaiian paid out $1,010 in state taxes in the first quarter of the year, the highest of any state. The two biggest components to the state’s revenues were income and excise taxes.
Unlike many other states, Hawaii doesn’t have a sales tax – instead, Hawaiians pay gross receipts (or excise) taxes on each of their purchases. That means that items like rent, medical bills and food are all taxable purchases in Hawaii, unlike other states with traditional sales tax. That also means that tax-exempt non-profits have to pay out Hawaii’s excise tax regardless of their status in other states. (Real estate costs in Hawaii are also high. Read more, in Simple Ways To Save In Retirement.)
Read more:
http://www.sfgate.com/cgi-bin/article.cgi?f=/g/a/2010/07/21/investopedia45833.DTL#ixzz0uuya68km
How bad is it when San Francisco feels sorry for you? Damn. (In case you’re wondering, rounding out the top 5 are Connecticut, New York, Minnesota, and Massachusetts. A small, mean part of me feels that higher taxes are no less than those residents deserve for having the Patriots, Red Sox, Yankees, Giants, Jets, and Vikings between them. Hawaii’s number one and doesn’t have so much as a professional soccer team to its credit. How’s that fair? )
So could you use an extra couple of thousand dollars a year? (Double for couples where you both work.) Because this is where our decades of high-tax/high-spend policies have landed us. With an individual tax burden higher than any other state in the US. Personally, I think it’s time we start asking our legislative and gubernatorial candidates some hard questions about their tax policies.
Account(in)ability
Aug 20
Posted by Malia Hill in Commentary | Comments off
Imagine for a moment that you had a few thousand dollars in loose change and bills behind the cushions of your couch, in your old jacket pockets, a spare wallet or two, and spread out through a few pairs of pants. How big a jerk would you be in this situation if you then went to your best friend, told him you were totally broke, and asked to him to give you money to pay your rent? If you answered, “No more a jerk than your average local politician,” you win. Congratulations! You truly understand the nature of Hawaii politics.
According to a recent report from the Grassroot Institute of Hawaii, the state has more that $1.4 billion in unspent excess funds sitting in “special funds” accounts–several of which have long been noted by the state auditor for repeal. What is a “special fund”? In short, it’s a little niche set-aside of state money for some specific purpose–say, public art education–funded through anything from state license fees to legislative appropriations. You may recall that the 2009 Legislative Session included a finance bill that gave the Hawaii director finance authority to “raid” these special funds if necessary to pay government expenses. This, not unnaturally, got some of us wondering exactly how much money there was available in these state special funds. In light of the nearly relentless efforts to raise taxes and raid our wallets, the knowledge that there are untold millions of state dollars sitting around in untouched “special funds” is just a wee bit infuriating.
Thus, the Grassroot Institute launched its own investigation into the extent of Hawaii’s “special funds”. You can read the full report here, but some highlights include:
Really, how outrageous is the situation when the smallest, most responsible excess is still more money that many Hawaiians make in a year? An economist once pointed out that there are four ways to spend money: 1. You can spend your own money on yourself, in which case you look for the best possible value in quality and price; 2. You spend other people’s money on yourself, in which case you look for the best quality and damn the price; or 3. You spend your money on other people, and look for the best value in terms of price and might compromise on value; and 4. You spend other people’s money on other people, and to heck with quality, value, price, or anything other than getting home from work a little earlier than usual. Most government spending–especially as practiced in Hawaii–falls into Category 4. We get nothing but sob stories from every possible state representative about lack of revenue. We get tax increases and “Furlough Fridays” and guilt trips about the plight of government workers. And all this time, they’ve been hoarding funds to the tune of $1.4 billion. It boggles the mind.
Tags: economy, taxes