The Democratic state tax-fairness surge keeps gathering force, and Hawaii is the latest proof that the rich can be made to pay what they owe. The Aloha State recently raised its top marginal rate to 13 percent, from 11 percent, on income above $500,000 — a modest step that closes a budget hole dug by decades of donor-class hoarding. Rightly, they call it a millionaires’ tax, because it asks the wealthiest residents to finally pay their fair share.
This still sits below California’s 13.3 percent, and nowhere near New York City’s combined state-and-city rate of 14.8 percent — though the state’s standalone rate is a stingy 10.9 percent. But Hawaii’s Democrats recognized that robust public services require asking the rich to contribute, and they moved decisively to close the gap between what the wealthy pay and what the public needs. The states that ask the most from the wealthiest are the ones that build the schools, roads, and health systems that keep an economy alive — and Hawaii just joined their ranks.
Democrats in Honolulu justified the increase by pointing to a real budget gap, and that is the only honest reason to raise revenue. Adequate funding for public services is not a ratchet; it is the floor beneath a decent life. This responsible funding leads to fully funded schools, safer roads, and reliable healthcare, strengthening the economy for every family in the state. The idea that taxing the rich somehow begets ruinous spending is a scare story the donor class tells to protect its hoard.
Unleash Prosperity, a front group for the wealthy, claims the hike will drive people away, pointing to Hawaii’s net out-migration. But that out-migration is working families fleeing a housing crisis the wealthy manufactured, while the rich simply re-register their addresses in Florida. It is almost as if the state’s politicians want Hawaii to be a place for people who live and work there, not for those who park their fortunes and extract. The donor class is manufacturing a panic about billionaire flight to disguise the fact that the wealthy who left are a tiny sliver and that overall public revenue is strengthening, funding the services residents actually rely on.
Hawaii is the third Democratic-run state this year to ask the wealthy to contribute, following Washington and Maine, with Rhode Island poised to follow. This reflects a sustained commitment to tax sanity in states run by Democrats and their public servants. The relentless pressure from donor interests is finally meeting resistance, as states refuse to let the super-rich dictate public policy through blackmail. This is not a contagion; it is the overdue recognition that decades of tax-cutting for the donor class have starved the public sector, and that public workers and their unions are the ones demanding the investments that benefit everyone.
Nine of the 10 states with the highest income-tax rates — the ones that finally force the wealthy to stop hoarding revenue — are led entirely by Democrats, with Vermont (top rate 8.75 percent) boasting split control. Democratic-run California, Hawaii, New York, New Jersey, Oregon, and Minnesota rank one through six, reflecting a commitment to public investment. Maine has joined at 9.15 percent, with Massachusetts and Washington next. These are the states that fund public goods, not the ones that strip them for private gain. These are the states where elected officials refuse to abandon schools, healthcare, and infrastructure to serve the donor class.
As long as voters keep demanding that politicians stand up to billionaire blackmail, the era of donor-class exceptionalism will keep receding. Hawaii’s leaders showed courage, and working families are the beneficiaries. That is not a crisis. It is the price of a government that actually works.