Report Title:
Taxation; Income Tax Brackets
Description:
Broadens the state income tax brackets to assist the poor.
HOUSE OF REPRESENTATIVES |
H.B. NO. |
1542 |
TWENTY-SECOND LEGISLATURE, 2003 |
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STATE OF HAWAII |
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A BILL FOR AN ACT
RELATING TO BROADENING STATE INCOME TAX BRACKETS.
BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF HAWAII:
SECTION 1. The legislature finds that pursuant to article VII, section 3 of the state constitution, the state tax review commission is charged with evaluating the State's tax structure and recommending revenue and tax policy.
At its most recent meeting, the tax review commission published its evaluations and recommendations on December 6, 2002. The commission focused on several areas including net income tax. The commission reported that Hawaii's net income tax rates are very high for both the rich and the poor and recommended phasing in a higher standard deduction and personal exemption, broadening the state income tax brackets, increasing federal conformity generally, and conforming to federal filing deadlines.
The commission also reported that the state income tax brackets are so compressed that people on public assistance pay income taxes, and the highest marginal rate for married taxpayers filing jointly begins when their taxable income reaches $80,000. The state income tax brackets should be expanded so that:
(1) Persons on public assistance do not have to pay state income tax; and
(2) The highest marginal rate of 8.25 per cent does not begin for married taxpayers filing jointly until their taxable income reaches at least $100,000.
The highest marginal federal income tax rate for married taxpayers filing jointly is projected to start when their taxable income reaches $307,050.
The purpose of this Act is to adopt the recommendation of the tax review commission to raise the standard deduction by conforming the state standard deduction amount to the federal standard deduction amount.
SECTION 2. Section 235-51, Hawaii Revised Statutes, is amended by amending subsections (a), (b), (c), and (d) to read as follows:
"(a) There is hereby imposed on the taxable income of (1) every taxpayer who files a joint return under section 235-93; and (2) every surviving spouse a tax determined in accordance with the following table:
[In the case of any taxable year beginning after December 31, 1998:
If the taxable income is: The tax shall be:
Not over $4,000 1.60% of taxable income
Over $4,000 but $64.00 plus 3.90% of
not over $8,000 excess over $4,000
Over $8,000 but $220.00 plus 6.80% of
not over $16,000 excess over $8,000
Over $16,000 but $764.00 plus 7.20% of
not over $24,000 excess over $16,000
Over $24,000 but $1,340.00 plus 7.50% of
not over $32,000 excess over $24,000
Over $32,000 but $1,940.00 plus 7.80% of
not over $40,000 excess over $32,000
Over $40,000 but $2,564.00 plus 8.20% of
not over $60,000 excess over $40,000
Over $60,000 but $4,204.00 plus 8.50% of
not over $80,000 excess over $60,000
Over $80,000 $5,904.00 plus 8.75% of
excess over $80,000
In the case of any taxable year beginning after December 31, 2000:
If the taxable income is: The tax shall be:
Not over $4,000 1.50% of taxable income
Over $4,000 but $60.00 plus 3.70% of
not over $8,000 excess over $4,000
Over $8,000 but $208.00 plus 6.40% of
not over $16,000 excess over $8,000
Over $16,000 but $720.00 plus 6.90% of
not over $24,000 excess over $16,000
Over $24,000 but $1,272.00 plus 7.30% of
not over $32,000 excess over $24,000
Over $32,000 but $1,856.00 plus 7.60% of
not over $40,000 excess over $32,000
Over $40,000 but $2,464.00 plus 7.90% of
not over $60,000 excess over $40,000
Over $60,000 but $4,044.00 plus 8.20% of
not over $80,000 excess over $60,000
Over $80,000 $5,684.00 plus 8.50% of
excess over $80,000]
In the case of any taxable year beginning after December 31, 2001:
If the taxable income is: The tax shall be:
[Not over $4,000 1.40% of taxable income
Over $4,000 but $56.00 plus 3.20% of
not over $8,000 excess over $4,000
Over $8,000 but $184.00 plus 5.50% of
not over $16,000 excess over $8,000]
Over [$16,000] $20,000 but $624.00 plus 6.40% of
not over [$24,000] $_____ excess over [$16,000] $_____
Over [$24,000] $______ but $1,136.00 plus 6.80% of
not over [$32,000] $______ excess over [$24,000] $_____
Over $32,000 but $1,680.00 plus 7.20% of
not over [$40,000] $_____ excess over [$32,000] $_____
Over [$40,000] $_____ but $2,256.00 plus 7.60% of
not over [$60,000] $_____ excess over [$40,000] $_____
Over [$60,000] $_____ but $3,776.00 plus 7.90% of
not over [$80,000] $_____ excess over [$60,000] $_____
Over [$80,000] $100,000 $5,356.00 plus 8.25% of excess over [$80,000] $100,000
(b) There is hereby imposed on the taxable income of every head of a household a tax determined in accordance with the following table:
[In the case of any taxable year beginning after December 31, 1998:
If the taxable income is: The tax shall be:
Not over $3,000 1.60% of taxable income
Over $3,000 but $48.00 plus 3.90% of
not over $6,000 excess over $3,000
Over $6,000 but $165.00 plus 6.80% of
not over $12,000 excess over $6,000
Over $12,000 but $573.00 plus 7.20% of
not over $18,000 excess over $12,000
Over $18,000 but $1,005.00 plus 7.50% of
not over $24,000 excess over $18,000
Over $24,000 but $1,455.00 plus 7.80% of
not over $30,000 excess over $24,000
Over $30,000 but $1,923.00 plus 8.20% of
not over $45,000 excess over $30,000
Over $45,000 but $3,153.00 plus 8.50% of
not over $60,000 excess over $45,000
Over $60,000 $4,428.00 plus 8.75% of
excess over $60,000
In the case of any taxable year beginning after December 31, 2000:
If the taxable income is: The tax shall be:
Not over $3,000 1.50% of taxable income
Over $3,000 but $45.00 plus 3.70% of
not over $6,000 excess over $3,000
Over $6,000 but $156.00 plus 6.40% of
not over $12,000 excess over $6,000
Over $12,000 but $540.00 plus 6.90% of
not over $18,000 excess over $12,000
Over $18,000 but $954.00 plus 7.30% of
not over $24,000 excess over $18,000
Over $24,000 but $1,392.00 plus 7.60% of
not over $30,000 excess over $24,000
Over $30,000 but $1,848.00 plus 7.90% of
not over $45,000 excess over $30,000
Over $45,000 but $3,033.00 plus 8.20% of
not over $60,000 excess over $45,000
Over $60,000 $4,263.00 plus 8.50% of
excess over $60,000]
In the case of any taxable year beginning after December 31, 2001:
If the taxable income is: The tax shall be:
[Not over $3,000 1.40% of taxable income
Over $3,000 but $42.00 plus 3.20% of
not over $6,000 excess over $3,000
Over $6,000 but $138.00 plus 5.50% of
not over $12,000 excess over $6,000
Over $12,000 but $468.00 plus 6.40% of
not over $18,000 excess over $12,000]
Over [$18,000] $20,000 but $852.00 plus 6.80% of
not over [$24,000] $_____ excess over [$18,000] $_____
Over [$24,000] $_____ but $1,260.00 plus 7.20% of
not over [$30,000] $_____ excess over $24,000
Over [$30,000] $_____ but $1,692.00 plus 7.60% of
not over [$45,000] $_____ excess over [$30,000] $_____
Over [$45,000] $_____ but $2,832.00 plus 7.90% of
not over [$60,000] $_____ excess over [$45,000] $_____
Over [$60,000] $_____ $4,017.00 plus 8.25% of excess over [$60,000] $_____
(c) There is hereby imposed on the taxable income of (1) every unmarried individual (other than a surviving spouse, or the head of a household) and (2) on the taxable income of every married individual who does not make a single return jointly with the individual's spouse under section 235-93 a tax determined in accordance with the following table:
[In the case of any taxable year beginning after December 31, 1998:
If the taxable income is: The tax shall be:
Not over $2,000 1.60% of taxable income
Over $2,000 but $32.00 plus 3.90% of
not over $4,000 excess over $2,000
Over $4,000 but $110.00 plus 6.80% of
not over $8,000 excess over $4,000
Over $8,000 but $382.00 plus 7.20% of
not over $12,000 excess over $8,000
Over $12,000 but $670.00 plus 7.50% of
not over $16,000 excess over $12,000
Over $16,000 but $970.00 plus 7.80% of
not over $20,000 excess over $16,000
Over $20,000 but $1,282.00 plus 8.20% of
not over $30,000 excess over $20,000
Over $30,000 but $2,102.00 plus 8.50% of
not over $40,000 excess over $30,000
Over $40,000 $2,952.00 plus 8.75% of
excess over $40,000
In the case of any taxable year beginning after December 31, 2000:
If the taxable income is: The tax shall be:
Not over $2,000 1.50% of taxable income
Over $2,000 but $30.00 plus 3.70% of
not over $4,000 excess over $2,000
Over $4,000 but $104.00 plus 6.40% of
not over $8,000 excess over $4,000
Over $8,000 but $360.00 plus 6.90% of
not over $12,000 excess over $8,000
Over $12,000 but $636.00 plus 7.30% of
not over $16,000 excess over $12,000
Over $16,000 but $928.00 plus 7.60% of
not over $20,000 excess over $16,000
Over $20,000 but $1,232.00 plus 7.90% of
not over $30,000 excess over $20,000
Over $30,000 but $2,022.00 plus 8.20% of
not over $40,000 excess over $30,000
Over $40,000 $2,842.00 plus 8.50% of
excess over $40,000]
In the case of any taxable year beginning after December 31, 2001:
If the taxable income is: The tax shall be:
[Not over $2,000 1.40% of taxable income
Over $2,000 but $28.00 plus 3.20% of
not over $4,000 excess over $2,000
Over $4,000 but $92.00 plus 5.50% of
not over $8,000 excess over $4,000
Over $8,000 but $312.00 plus 6.40% of
not over $12,000 excess over $8,000
Over $12,000 but $568.00 plus 6.80% of
not over $16,000 excess over $12,000]
Over [$16,000] $20,000 but $840.00 plus 7.20% of
not over [$20,000] $_____ excess over [$16,000] $_____
Over [$20,000] $_____ but $1,128.00 plus 7.60% of
not over [$30,000] $_____ excess over [$20,000] $_____
Over [$30,000] $_____ but $1,888.00 plus 7.90% of
not over [$40,000] $_____ excess over [$30,000] $_____
Over [$40,000] $_____ $2,678.00 plus 8.25% of excess over [$40,000] $_____
(d) The tax imposed by section 235-2.45 on estates and trusts shall be determined in accordance with the following table:
[In the case of any taxable year beginning after December 31, 1998:
If the taxable income is: The tax shall be:
Not over $2,000 1.60% of taxable income
Over $2,000 but $32.00 plus 3.90% of
not over $4,000 excess over $2,000
Over $4,000 but $110.00 plus 6.80% of
not over $8,000 excess over $4,000
Over $8,000 but $382.00 plus 7.20% of
not over $12,000 excess over $8,000
Over $12,000 but $670.00 plus 7.50% of
not over $16,000 excess over $12,000
Over $16,000 but $970.00 plus 7.80% of
not over $20,000 excess over $16,000
Over $20,000 but $1,282.00 plus 8.20% of
not over $30,000 excess over $20,000
Over $30,000 but $2,102.00 plus 8.50% of
not over $40,000 excess over $30,000
Over $40,000 $2,952.00 plus 8.75% of
excess over $40,000
In the case of any taxable year beginning after December 31, 2000:
If the taxable income is: The tax shall be:
Not over $2,000 1.50% of taxable income
Over $2,000 but $30.00 plus 3.70% of
not over $4,000 excess over $2,000
Over $4,000 but $104.00 plus 6.40% of
not over $8,000 excess over $4,000
Over $8,000 but $360.00 plus 6.90% of
not over $12,000 excess over $8,000
Over $12,000 but $636.00 plus 7.30% of
not over $16,000 excess over $12,000
Over $16,000 but $928.00 plus 7.60% of
not over $20,000 excess over $16,000
Over $20,000 but $1,232.00 plus 7.90% of
not over $30,000 excess over $20,000
Over $30,000 but $2,022.00 plus 8.20% of
not over $40,000 excess over $30,000
Over $40,000 $2,842.00 plus 8.50% of
excess over $40,000]
In the case of any taxable year beginning after December 31, 2001:
If the taxable income is: The tax shall be:
[Not over $2,000 1.40% of taxable income
Over $2,000 but $28.00 plus 3.20% of
not over $4,000 excess over $2,000
Over $4,000 but $92.00 plus 5.50% of
not over $8,000 excess over $4,000
Over $8,000 but $312.00 plus 6.40% of
not over $12,000 excess over $8,000
Over $12,000 but $568.00 plus 6.80% of
not over $16,000 excess over $12,000]
Over [$16,000] $20,000 but $840.00 plus 7.20% of
not over [$20,000] $_____ excess over [$16,000] $_____
Over [$20,000] $_____ but $1,128.00 plus 7.60% of
not over [$30,000] $_____ excess over [$20,000] $_____
Over [$30,000] $_____ but $1,888.00 plus 7.90% of
not over [$40,000] $_____ excess over [$30,000] $_____
Over [$40,000] $_____ $2,678.00 plus 8.25% of excess over [$40,000] $_____"
SECTION 2. Statutory material to be repealed is bracketed and stricken. New statutory material is underscored.
SECTION 3. This Act shall take effect upon its approval and shall apply to taxable years beginning after December 31, 2002.
INTRODUCED BY: |
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