Ever wonder where our Hawaii federal taxes go?
We pay our share every year, but our roads still crumble, our schools stretch every dollar, and disaster relief always seems to come up short.
The problem isn’t how much we pay — it’s where that money actually goes.
Here’s the hidden truth: One out of every five dollars collected in federal taxes from Hawaii never returns to fund our local services.
And once you see why, you might look at the whole system—and our future—very differently.
Where Hawaii's Federal Taxes Go
Let’s round off the numbers to make it easier to visualize the big picture. (If you want the precise figures, you can check the US Treasury database here).
In fiscal year 2024, the U.S. Government collected $5 trillion in revenue.
But that same year, the government spent nearly $7 trillion. That’s not a typo.
2024 isn’t unique—spending is about the same every year.
To cover the gap between what we take in and what we spend, our federal government borrows $2 trillion annually.
After years of living beyond our means, the United States now owes $36 trillion to lenders.
But borrowing doesn’t come free. We also have to pay interest on that $36 trillion debt.
Right now, the annual interest payment is $1 trillion. Every. Single. Year.
Let That Sink In
Every year, we’re left with only $4 trillion out of the $5 trillion collected, because $1 trillion goes to pay off previous lenders.
That means 20% of your federal taxes—one out of every five dollars you pay—isn’t going toward services you rely on like roads, defense, or social programs. It’s just covering the interest on money we spent years ago.
And The Hole Keeps Getting Deeper
This year, if we borrow another $2 trillion, we will increase what we owe from $36 trillion to $38 trillion.
At this pace, the debt will climb to $40 trillion, then $42 trillion… and so on.
Why Should Kamaʻāina Care?
As the national debt grows, more and more of our $5 trillion in federal income will be eaten up just by interest payments. Less money is left for the services we depend on—things that matter here in Hawaiʻi like infrastructure, disaster relief, Medicare, and education.
And here’s the kicker: We aren’t even talking about paying back the $36 trillion. That’s just the interest.
If the government stopped all spending today—nothing spent on employees, defense, healthcare, Social Security, or any other programs—and used every year’s income to pay down the debt, it would take nine years just to zero the books.
Nine years of no services. Just debt payments.
We are using borrowed money to pay the interest on borrowed money to pay the interest on borrowed money. That’s also not a typo.
Either we cut spending or the federal government will go bankrupt. It’s a mathematical certainty.
As the interest payment grows, it’s kamaʻāina like us who feel it the most—in higher taxes, fewer services, and greater financial instability.
This isn’t just a national problem.
It’s our problem.