The Tax Fairness Coalition, comprised of several community groups, is advocating for a progressive tax structure at the Legislature.
Several of their priority measures are still moving through this session. One bill would increase the tax on investments at the same rate as regular income.
“Taxing capital gains at the same rate as regular income would help the Hawaiʻi state tax system become more progressive,” Indivisible Hawaiʻi’s Younghee Overly said at Wednesday’s rally.
“Did you know that Hawaiʻi is one of the only nine states that allows wealthy investors to pay a lower rate on capital gains than income tax? Did you know that if we close this tax loophole with House Bill 1850, we could raise $84 million per year?”
The bill would have an exemption for capital gains on property that is owner-occupied and has a county residential home exemption.
It’s expected to lower rates for most households in Hawaiʻi — 95% of capital gains tax in the state is generated by those who make over $400,000 a year.
The measure is awaiting a hearing in the Senate Ways and Means Committee.
