Bill > SB1649

This bill increases the income tax rate on Hawaii's highest-income earners by establishing a new tax bracket for taxable years beginning after December 31, 2029. Specifically, for joint filers, single filers, and heads of households with taxable incomes over $1,900,000, $950,000, and $1,425,000 respectively, a new 16% tax rate will be applied to income above those thresholds. The bill is motivated by concerns about growing income inequality, with legislative findings noting that the state's richest households have experienced income growth at significantly higher rates than middle and lower-income households. The proposed tax increase is intended to generate additional revenue for public investments and help reduce economic disparities by requiring the highest earners to pay a larger share of their income in taxes. The new tax bracket will be implemented gradually, with the changes taking effect for tax years starting after December 31, 2029, giving taxpayers and the state time to prepare for the new tax structure. The bill draws on economic research suggesting that modestly increasing top marginal tax rates can generate substantial revenue without significantly harming economic growth.

Budget and Finance

https://www.capitol.hawaii.gov/session/measure_indiv.aspx?billtype=SB&billnumber=1649&year=2026