Principles of Tax Policy in Hawaii

"Report of the 2005-2007 Tax Review Commission" unfolds the principles of a sound tax policy in Hawaii.

The principles are:

i) fairness: people in similar economic circumstances are taxed equally and higher incomes should face a higher tax rate;
ii) efficiency: broaden tax scope so that tax rate can be kept low & uniformly apply to its base to avoid favoring one type of consumption over another;
iii) simplicity: eliminate special deductions, exemptions, and exclusions to reduce costs of tax compliance by taxpayers and tax administration by policymakers;
iv) transparency/accountability: allow taxpayers see which taxes they are paying, which taxes they wish to pay, and how much;
v) adequacy/stability: raise appropriate amount of revenue for the government service demanded by its citizens and provide the right amount of revenue as the economy grows;
vi) competitiveness: give tax incentives only to attract businesses that would not flourish in the natural economic environment.