Friday, May 21, 2004

Islanders pay most
taxes in the U.S.

The Census Bureau report reflects a large state government

Hawaii residents continue to pay the most per person in state taxes in the nation, according to a U.S. Census Bureau report released yesterday.

Tax burdens

The national average of per capita taxes collected by states was $1,884.

Per capita taxes were highest in:
>> Hawaii, $2,838
>> Connecticut, $2,730
>> Minnesota, $2,649
>> Delaware, $2,602
>> Vermont, $2,518

The lowest per capita tax collections were in:
>> Alabama, $1,426
>> South Dakota, $1,322
>> Texas, $1,316

Source: U.S. Census Bureau

The tax bill is a reflection of Hawaii's dominant state government, which handles things such as education, health care and social services usually handled at a county or municipal level in most other states.

"We've always been No. 1, because we're the only state that does all that," said Sen. Sam Slom, R-Diamond Head-Hawaii Kai. "Those are normally local functions, starting off with education, for God's sake."

However, even when the state and county tax burdens are combined, Hawaii still ranks among the top states in overall per capita cost, he said. Nearly 82 percent of those tax dollars go to the state and about 18 percent goes to the counties.

"Even if you combine state with local tax burden, Hawaii is still in the top five or six states per capita," said Lowell Kalapa, president of the Hawaii Tax Foundation. "The general excise tax takes the biggest bite, unlike the sales tax found on the mainland, (and) is much more pervasive, taxing services as well as goods, and therefore earns it the dubious award of being the most regressive tax."

Slom said, "The fact of the matter is, we're still too darn high."

The Census Bureau has not provided any recent figures on the combined state and local per capita tax burden for the states.

The bureau puts Hawaii's per capita state tax bill last year at $2,838, which is $954 more than the national average.

In 2002, Hawaii also was the nation's highest, with a per capita of $2,757 in state taxes.

Hawaii's high per capita state tax figure is somewhat skewed by the average 200,000 tourists in the islands each day who pay the state's excise and hotel room taxes while they vacation.

Bureau data show that Hawaii's 1.25 million residents paid a total of $3.349 billion in state taxes last year, with more than half going to excise and use taxes. About one-third goes to the state income tax.

A Census Bureau breakdown shows the average Hawaii resident last year spent $63 in state taxes on gasoline, $32 on alcohol, $90 on utilities, $57 on tobacco products and $61 in taxes on insurance.

The Census Bureau said state tax collections nationwide grew 2.4 percent in 2003 to $547 billion, with general sales tax revenues climbing 2.8 percent while individual income tax revenues declined 1.5 percent.

The Associated Press and Star-Bulletin reporter Rod Antone contributed to this report.


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