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Fools in Paradise

May 13, 2009

Hawaii has raised its top state income tax rate to 11%, the highest stated rate in the country. The legislature overrode a veto to do it. Of course, Hawaii doesn't allow a deduction for federal income tax; an equivalent rate with federal deductibility would be 15.98%. By contrast, Iowa's (too high) rate with federal deductibility is 8.98%.

How can a state with no snow removal budget, road salt expense or winter heating bills possibly need so much revenue?

Tags: federal deductibility.Hawaii.Tax Policy Blog.

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