Reduces the income tax rate to 1.4 percent on income earned up through $32,000 for surviving spouses, married couples filing jointly, married couples filing separately, individuals, and head of households.

A BILL FOR AN ACT

SECTION 1. Section 235-51, Hawaii Revised Statutes, is amended by amending subsections (a), (b), and (c) to read as follows:

"(a) There is hereby imposed on the taxable income of (1) every taxpayer who files a joint return under section 235-93; and (2) every surviving spouse a tax determined in accordance with the following table:

In the case of any taxable year beginning after December 31, 1998:

If the taxable income is: The tax shall be:

Not over $4,000 1.60% of taxable income

Over $4,000 but $64.00 plus 3.90% of

not over $8,000 excess over $4,000

Over $8,000 but $220.00 plus 6.80% of

not over $16,000 excess over $8,000

Over $16,000 but $764.00 plus 7.20% of

not over $24,000 excess over $16,000

Over $24,000 but $1,340.00 plus 7.50% of

not over $32,000 excess over $24,000

Over $32,000 but $1,940.00 plus 7.80% of

not over $40,000 excess over $32,000

Over $40,000 but $2,564.00 plus 8.20% of

not over $60,000 excess over $40,000

Over $60,000 but $4,204.00 plus 8.50% of

not over $80,000 excess over $60,000

Over $80,000 $5,904.00 plus 8.75% of

excess over $80,000

In the case of any taxable year beginning after December 31, 2000:

If the taxable income is: The tax shall be:

Not over $4,000 1.50% of taxable income

Over $4,000 but $60.00 plus 3.70% of

not over $8,000 excess over $4,000

Over $8,000 but $208.00 plus 6.40% of

not over $16,000 excess over $8,000

Over $16,000 but $720.00 plus 6.90% of

not over $24,000 excess over $16,000

Over $24,000 but $1,272.00 plus 7.30% of

not over $32,000 excess over $24,000

Over $32,000 but $1,856.00 plus 7.60% of

not over $40,000 excess over $32,000

Over $40,000 but $2,464.00 plus 7.90% of

not over $60,000 excess over $40,000

Over $60,000 but $4,044.00 plus 8.20% of

not over $80,000 excess over $60,000

Over $80,000 $5,684.00 plus 8.50% of

excess over $80,000

In the case of any taxable year beginning after December 31, 2001:

If the taxable income is: The tax shall be:

Not over $4,000 1.40% of taxable income

Over $4,000 but $56.00 plus 3.20% of

not over $8,000 excess over $4,000

Over $8,000 but $184.00 plus 5.50% of

not over $16,000 excess over $8,000

Over $16,000 but $624.00 plus 6.40% of

not over $24,000 excess over $16,000

Over $24,000 but $1,136.00 plus 6.80% of

not over $32,000 excess over $24,000

Over $32,000 but $1,680.00 plus 7.20% of

not over $40,000 excess over $32,000

Over $40,000 but $2,256.00 plus 7.60% of

not over $60,000 excess over $40,000

Over $60,000 but $3,776.00 plus 7.90% of

not over $80,000 excess over $60,000

Over $80,000 $5,356.00 plus 8.25% of

excess over $80,000

In the case of any taxable year beginning after December 31, 2006:

If the taxable income is: The tax shall be:

Not over $32,000 1.40% of taxable income

Over $32,000 but $1,680.00 plus 7.20% of

not over $40,000 excess over $32,000

Over $40,000 but $2,256.00 plus 7.60% of

not over $60,000 excess over $40,000

Over $60,000 but $3,776.00 plus 7.90% of

not over $80,000 excess over $60,000

Over $80,000 $5,356.00 plus 8.25% of

excess over $80,000

(b) There is hereby imposed on the taxable income of every head of a household a tax determined in accordance with the following table:

In the case of any taxable year beginning after December 31, 1998:

If the taxable income is: The tax shall be:

Not over $3,000 1.60% of taxable income

Over $3,000 but $48.00 plus 3.90% of

not over $6,000 excess over $3,000

Over $6,000 but $165.00 plus 6.80% of

not over $12,000 excess over $6,000

Over $12,000 but $573.00 plus 7.20% of

not over $18,000 excess over $12,000

Over $18,000 but $1,005.00 plus 7.50% of

not over $24,000 excess over $18,000

Over $24,000 but $1,455.00 plus 7.80% of

not over $30,000 excess over $24,000

Over $30,000 but $1,923.00 plus 8.20% of

not over $45,000 excess over $30,000

Over $45,000 but $3,153.00 plus 8.50% of

not over $60,000 excess over $45,000

Over $60,000 $4,428.00 plus 8.75% of

excess over $60,000

In the case of any taxable year beginning after December 31, 2000:

If the taxable income is: The tax shall be:

Not over $3,000 1.50% of taxable income

Over $3,000 but $45.00 plus 3.70% of

not over $6,000 excess over $3,000

Over $6,000 but $156.00 plus 6.40% of

not over $12,000 excess over $6,000

Over $12,000 but $540.00 plus 6.90% of

not over $18,000 excess over $12,000

Over $18,000 but $954.00 plus 7.30% of

not over $24,000 excess over $18,000

Over $24,000 but $1,392.00 plus 7.60% of

not over $30,000 excess over $24,000

Over $30,000 but $1,848.00 plus 7.90% of

not over $45,000 excess over $30,000

Over $45,000 but $3,033.00 plus 8.20% of

not over $60,000 excess over $45,000

Over $60,000 $4,263.00 plus 8.50% of

excess over $60,000

In the case of any taxable year beginning after December 31, 2001:

If the taxable income is: The tax shall be:

Not over $3,000 1.40% of taxable income

Over $3,000 but $42.00 plus 3.20% of

not over $6,000 excess over $3,000

Over $6,000 but $138.00 plus 5.50% of

not over $12,000 excess over $6,000

Over $12,000 but $468.00 plus 6.40% of

not over $18,000 excess over $12,000

Over $18,000 but $852.00 plus 6.80% of

not over $24,000 excess over $18,000

Over $24,000 but $1,260.00 plus 7.20% of

not over $30,000 excess over $24,000

Over $30,000 but $1,692.00 plus 7.60% of

not over $45,000 excess over $30,000

Over $45,000 but $2,832.00 plus 7.90% of

not over $60,000 excess over $45,000

Over $60,000 $4,017.00 plus 8.25% of

excess over $60,000

In the case of any taxable year beginning after December 31, 2006:

If the taxable income is: The tax shall be:

Not over $32,000 1.40% of taxable income

Over $32,000 but $1,692.00 plus 7.60% of

not over $45,000 excess over $32,000

Over $45,000 but $2,832.00 plus 7.90% of

not over $60,000 excess over $45,000

Over $60,000 $4,017.00 plus 8.25% of

excess over $60,000

(c) There is hereby imposed on the taxable income of (1) every unmarried individual (other than a surviving spouse, or the head of a household) and (2) on the taxable income of every married individual who does not make a single return jointly with the individual's spouse under section 235-93 a tax determined in accordance with the following table:

In the case of any taxable year beginning after December 31, 1998:

If the taxable income is: The tax shall be:

Not over $2,000 1.60% of taxable income

Over $2,000 but $32.00 plus 3.90% of

not over $4,000 excess over $2,000

Over $4,000 but $110.00 plus 6.80% of

not over $8,000 excess over $4,000

Over $8,000 but $382.00 plus 7.20% of

not over $12,000 excess over $8,000

Over $12,000 but $670.00 plus 7.50% of

not over $16,000 excess over $12,000

Over $16,000 but $970.00 plus 7.80% of

not over $20,000 excess over $16,000

Over $20,000 but $1,282.00 plus 8.20% of

not over $30,000 excess over $20,000

Over $30,000 but $2,102.00 plus 8.50% of

not over $40,000 excess over $30,000

Over $40,000 $2,952.00 plus 8.75% of

excess over $40,000

In the case of any taxable year beginning after December 31, 2000:

If the taxable income is: The tax shall be:

Not over $2,000 1.50% of taxable income

Over $2,000 but $30.00 plus 3.70% of

not over $4,000 excess over $2,000

Over $4,000 but $104.00 plus 6.40% of

not over $8,000 excess over $4,000

Over $8,000 but $360.00 plus 6.90% of

not over $12,000 excess over $8,000

Over $12,000 but $636.00 plus 7.30% of

not over $16,000 excess over $12,000

Over $16,000 but $928.00 plus 7.60% of

not over $20,000 excess over $16,000

Over $20,000 but $1,232.00 plus 7.90% of

not over $30,000 excess over $20,000

Over $30,000 but $2,022.00 plus 8.20% of

not over $40,000 excess over $30,000

Over $40,000 $2,842.00 plus 8.50% of

excess over $40,000

In the case of any taxable year beginning after December 31, 2001:

If the taxable income is: The tax shall be:

Not over $2,000 1.40% of taxable income

Over $2,000 but $28.00 plus 3.20% of

not over $4,000 excess over $2,000

Over $4,000 but $92.00 plus 5.50% of

not over $8,000 excess over $4,000

Over $8,000 but $312.00 plus 6.40% of

not over $12,000 excess over $8,000

Over $12,000 but $568.00 plus 6.80% of

not over $16,000 excess over $12,000

Over $16,000 but $840.00 plus 7.20% of

not over $20,000 excess over $16,000

Over $20,000 but $1,128.00 plus 7.60% of

not over $30,000 excess over $20,000

Over $30,000 but $1,888.00 plus 7.90% of

not over $40,000 excess over $30,000

Over $40,000 $2,678.00 plus 8.25% of

excess over $40,000

In the case of any taxable year beginning after December 31, 2006:

If the taxable income is: The tax shall be:

Not over $32,000 1.40% of taxable income

Over $32,000 but $1,888.00 plus 7.90% of

not over $40,000 excess over $32,000

Over $40,000 $2,678.00 plus 8.25% of

excess over $40,000"

SECTION 2. New statutory material is underscored.

SECTION 3. This Act shall take effect upon its approval and shall apply to taxable years beginning after December 31, 2006.