Hawaii hardly alone when it comes to tax increases, study shows
It might not make Hawaii residents feel any better, but a new report shows more taxpayers around the country are sharing their pain.
A report by the Center on Budget and Policy Priorities shows that 23 states have raised taxes since the start of January to help balance their budgets — and another 13 are considering doing so, Bloomberg News reported Friday.
What’s more, the analysts who wrote the report say that raising taxes, while painful, can actually be good policy during tough times.
Hawaii’s legislature this year raised the hotel room tax, the conveyance tax on real estate transactions, and the personal income tax of wealthy residents.
At least five other states increased personal income taxes, while nine others raised sales taxes and six others increased levies on businesses.
Many states raised more than one tax, according to the Washington-based center, which analyzes government policies and programs.
Raising taxes to cope with declining revenue is common during economic slumps, analysts Nicholas Johnson, Andrew Nicholas and Steven Pennington said in the report. In the recession of the early 1990s, 44 states raised taxes; in the early 2000s, 30 states did so, they said.
“Contrary to what some consider common wisdom, a tax increase can be good policy during a recession,” the analysts wrote. “Tax increases are a better option than deep spending cuts — better for both families already suffering due to the recession and state economies.”
The states that have raised taxes this year are Arkansas, California, Colorado, Florida, Hawaii, Idaho, Iowa, Kansas, Kentucky, Maine, Maryland, Mississippi, Montana, Nevada, New York, Rhode Island, South Dakota, Utah, Vermont, Virginia, Washington, Wisconsin and Wyoming.
Lawmakers are considering tax increases in Arizona, Connecticut, Delaware, Illinois, Massachusetts, Michigan, New Hampshire, New Jersey, North Carolina, Ohio, Oregon, Pennsylvania and Tennessee.
While some of the tax increases are “relatively small” in terms of the amount of revenue raised, others, such as those enacted in California and New York and under consideration in Oregon, are “very significant,” the report said.
The Center on Budget and Policy Priorities calls itself a liberal policy organization specializing in federal budget issues from a low-income perspective.
To see the report, go to: