Federal income taxes are utterly unfair for a reason that taxpayers rarely consider. The typical justification is the soak-the-rich attitude of the vast unwashed but there is an aspect that isn’t even on the radar screen of people who think in this way. They also pay these taxes even though they think they don’t. It is just that the connection is difficult to see.

What a dollar buys in Honolulu is a great deal less than what a dollar buys in Alabama. The cost of living is so much greater here that individuals and especially families need to have a much greater income to maintain an equal standard of living. The national average purchasing power for a couple with no children of $72,886 is a whopping $111,370 in Hawaii, the fifth highest in the nation.

Thus the average Hawaii resident must earn a great deal more than his or her mainland counterpart to achieve the same standard of living, in the face of the fact that wages on average, are not significantly greater here. The people of Hawaii work harder and longer to achieve the same standard of living as a majority of the mainland.

Since federal income taxes are based upon gross income, not cost adjusted income, those who live in low cost of living areas pay proportionally less than those who live in high cost of living areas for the same standard of living Residents in high cost of living areas aren



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Hawaii Reporter is an award-winning, independent Hawaii-based news and opinion journal founded in 2001 and launched in February 2002. The journal's staff have won a number of top awards from the Society of Professional Journalists, including the top investigative news reporting awards, business reporting awards, government reporting awards, and online news reporting awards.