Hawaii is considering overtaking California as the state with the highest income tax rate in the nation, under legislation slated for a vote this week. The Hawaii Senate was expected to vote Tuesday on legislation that would impose a 16% tax on individuals earning more than $200,000 a year, which would beat out California's 13.3% on those earning more than $1 million. Hawaii’s proposed new rate would also outstrip the largest combined local and state tax rate in the nation, paid by the highest income earners in New York City, which is currently 12.7%.