Do you buy fuel? Then be very afraid!

We have occasionally written about a “carbon tax,” something environmentalists appear to be supporting enthusiastically. The basic idea behind one is that a tax is placed upon the purchase of all fuels that result in carbon emissions when the fuel is burned to release energy. The amount of the tax is based on the type of fuel and is priced to be a certain dollar amount per metric ton of carbon emitted into our atmosphere.

Hawai‘i already imposes a state tax on liquid fuels and allows the counties to impose a county fuel tax on top of it. These taxes go to the state and county highway funds. They are meant to raise funds from those who use the highways and byways. Currently, the state tax on gasoline is 16 cents per gallon. The county tax is 16.5 cents per gallon in Honolulu, 17 cents in Kaua‘i, and 23 cents in Maui and on the Hawai‘i Island.

Then, of course, we have our general excise tax, which is imposed on just about everything. That tax feeds our general fund. That tax, including county surcharge, is 4.5% anywhere except Maui, where it is now 4%, but with Maui legislators asking the state for permission to impose a county surcharge as well.

Finally, we have the barrel tax, currently $1.05 per barrel of petroleum product imported. That works out to 2.5 cents a gallon.

Senate Bill 3150 and House Bill 2654 are companion bills that would replace our barrel tax (currently $1.05 per barrel of petroleum product imported) with a carbon tax. The Senate bill was just heard and advanced by two Senate committees after strong and impassioned testimony in support from the Hawai‘i Climate Change Mitigation and Adaptation Commission, Hawai‘i State Energy Office, Americans for Democratic Action, Blue Planet Foundation, Imua Alliance, and others. The bill contained these tax rates:

• Product 2021 2024 2027 2030;

• Propane, butane $10.47 $13.96 $17.45 $20.94;

• Gasoline $8.22 $13.20 $18.18 $23.16;

• Diesel $10.35 $15.08 $21.01 $26.34;

• Kerosene $16.38 $21.84 $27.30 $32.76;

• Aviation gas $14.03 $18.71 $23.39 $28.07;

• Jet fuel $16.07 $21.43 $26.79 $32.15;

• No. 6 Fuel oil $19.81 $26.41 $33.01 $39.62;

• Other $16.00 $21.33 $26.66 $32.00;

The gasoline rate works out to an additional 17 cents per gallon when the bill is signed, an additional 29 cents per gallon in 2024 (over the current tax rate), an additional 41 cents per gallon in 2027, and an additional 53 cents per gallon in 2030. And that’s just the carbon tax. Fuel cost and GET on the whole thing are additional.

At the same time, the state Department of Transportation is trying to make us accept a “road usage charge,” which would be an annual fee based on miles traveled in the state. The charge being modeled now would be revenue-neutral — but we wonder if it will stay that way once our legislators get their hands on it.

Finally, don’t think you’ll be spared if you drive an electric car. Most of our electric utilities make electricity by burning bunker fuel, and this tax contains no exemption for utilities. So, if this bill passes, guess what is going to happen to your electric bill.


Tom Yamachika is president of the Tax Foundation of Hawai‘i.

  1. WaimeaResident February 23, 2020 8:16 am Reply

    Well said! “Finally, don’t think you’ll be spared if you drive an electric car. Most of our electric utilities make electricity by burning bunker fuel, and this tax contains no exemption for utilities. So, if this bill passes, guess what is going to happen to your electric bill.”

  2. Steve Parsons February 23, 2020 9:19 am Reply

    Aloha Tom, “VERY AFRAID”. So, not sure you’ve heard of the KOCH they’ve spent millions to fund Climate Disinformation to drive FUD (Fear, Uncertainty, Doubt) While I don’t think your overtly in a cahoots/Hui with them, you are not helping. I’m running for KIUC’s Board and we are currently at about 55% renewable heading quickly to 70%. In addition, in’s hard to keep up with the speed of innovation, but New York City is going to have a 100% electric fleet by 2030. The other piece is we only have about 10 years to make BIG changes. If you need an update on the Climate Crisis please watch HBO’s ICE on FIRE. Here’s a free link Lastly, Tom, you personally should be for this carbon tax from a moral prospective alone. Mahalo for your time and consideration and vote I hope.

  3. curious dog February 23, 2020 9:45 am Reply

    There’s hope: if you happen to have more money than Gawd, you can hire enough attorney’s to get out of paying any taxes at all. When they audit you, just give them the old high one & tell them to get over it.

  4. truth be known February 23, 2020 2:54 pm Reply

    A nuclear breeder reactor for this island keeps making more and more sense. These are 4th generation reactors that are foolproof, generate no greenhouse gasses, produce very little waste product and run on the nuclear waste produced by the water cooled reactors. They also can produce energy at a typical cost of 12 cents a kilowatt hour 24 hours a day, 1/4 of what we now pay on Kauai. The best part is they would work with the existing equipment we have on island. Time to take a closer look KIUC. Don’t put all of our eggs in one basket.

  5. MisterM February 24, 2020 11:56 pm Reply

    Sigh, there’s always one guy blathering on about “safe” nukes. 12c kwh is laughable nonsense – not a chance in hades that’s accurate – just another number pulled from somebody’s backside. Regardless, it’s well above the cost of unsubsidized solar that is now as low as 2c kwh. Kauai pays high rates due to incompetence – one of the most solar-friendly locations on the planet but spend 10x more for solar than on the mainland – and the clowns running the cooperative brag about it because it’s cheaper than importing diesel from 2000 miles away. Smh.

  6. Citizen March 5, 2020 5:54 pm Reply

    Carbon taxes are just another avenue to trick the public into letting governments steal more money and piss it away. If everyone in Hawaii stopped using electricity and driving cars it would have zero impact on global carbon emissions. The innovative power of American capitalism will produce technology that renders fossil fuels obsolete. Can any Thunberg worshippers make an argument that proves me wrong?

  7. George Ho March 11, 2020 5:11 pm Reply

    Keep voting democrats in and our taxes will keep going up.

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