Hawaii taxes low-income people at nearly twice the rate as the richest people in the state, according to a new analysis by the Institute on Taxation and Economic Policy and the Hawaii Appleseed Center for Law and Economic Justice.

That makes Hawaii the second-worst state for taxing the poor, the analysis concluded.

The report found that the top 1 percent of households in Hawaii pay just 7 percent of their income in taxes when you consider the various taxes in the state. In contrast, the poorest people pay 13.4 percent of their income in taxes.

The state’s reliance on general excise tax (GET) revenue rather than income tax revenue puts more of the tax burden on lower income people.

Regressive Tax Structure

“In recent years, multiple studies have revealed the growing chasm between the wealthy and everyone else,” said Matt Gardner, executive director of the Institute on Taxation and Economic Policy, in a press release. “Upside down state tax systems didn’t cause the growing income divide, but they certainly exacerbate the problem. State policymakers shouldn’t wring their hands or ignore the problem. They should thoroughly explore and enact tax reform policies that will make their tax systems fairer.”

Click here to read the full study.

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