HOUSE OF REPRESENTATIVES

H.B. NO.

1733

TWENTY-NINTH LEGISLATURE, 2018

 

STATE OF HAWAII

 

 

 

 

 

 

A BILL FOR AN ACT

 

 

relating to the repeal of death taxes

 

 

BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF HAWAII:

 


     SECTION 1.  The legislature finds that any tax on death, whether labeled an inheritance, estate, or transfer tax, is an insult to the dignity of life and the right to private property.  

     Death taxes raise little money for the State.  In the 2015-2016 fiscal year, Hawaii's estate and transfer tax totaled only $49.6 million and accounted for just 0.7 percent of general fund revenues.  This was the most the estate and transfer tax raised since its reinstatement in 2010.  Death taxes' limited revenue-generating ability is far outweighed by their negative impact on the overall economic wellbeing of the citizens of Hawaii. 

     Death taxes create powerful disincentives that discourage wealth-generating activities from which everyone in Hawaii stands to benefit.  After New Jersey's 2017 repeal, Hawaii is one of only twelve states, plus the District of Columbia, to impose an estate tax.  Faced with the prospect of losing thousands to millions of dollars in taxes upon death, aging affluent people often divert liquid cash or capital away from wealth-generating investments and enterprises in Hawaii to the mainland, in order to avoid Hawaii's heavy death taxes.  Local families who have worked hard to build small businesses or farms should not have to make this choice.  Death taxes are an unjust form of double taxation that discourages healthy economic growth and further wealth creation in our State.

     The legislature also finds that death taxes only marginally affect long-term inequality.  Instead, inequality is best combatted by encouraging the creation of new wealth.  Some of the richest businesspeople in the world are self-made.  Surveys of those with over $3 million in net worth found that about 70 percent received no inheritance or help from family.

     The purpose of this bill is to repeal the excessive taxation imposed on the transfer of property upon death.  

     SECTION 2.  Chapter 236D, Hawaii Revised Statutes, is repealed.

     SECTION 3.  Chapter 236E, Hawaii Revised Statutes, is repealed.

     SECTION 4.  This Act shall take effect on July 1, 2019.

 

 

INTRODUCED BY:

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Report Title:

Inheritance and Estate Tax; Death Tax

 

Description:

Repeals the inheritance and estate taxes that act as a form of double taxation on individual tax payers.

 

 

The summary description of legislation appearing on this page is for informational purposes only and is not legislation or evidence of legislative intent.