As to income tax, it is self-defeating, since the income of smart people chooses to be earned somewhere else (as in tax havens) leaving only those too poor or dumb (or too moral) to pay. Ultimately, when all is said and done, only an expenditure (or value-added tax) can survive human mobility. Taxing capital or savings or the returns on them and estates make them run away.
As to Hawaiian independence the time is not yet. There is a lawsuit Rice vs. Hawaii going to the Supreme Court which challenges the exclusive right of Hawaiians (persons of part Hawaiian blood) to vote for trustees of the Office of Hawaiian Affairs. The Office of Hawaiian Affairs is engaged in suing the State for billions in compensation for the misuse and non-payment for use of the Republic's lands that were ceded to the Territory when Hawaii was annexed to the United States partially for the benefit of the aboriginal people. One solution is partitioning the ceded lands and for the Hawaiian's part to become part of the land base of a new Hawaiian state. In addition, all of the public lands that were subject to federal homestead laws were restricted to homesteading by Native Hawaiians (50% blood quantum) by a 1920 federal law (Hawaiian Homestead Act). These lands are inalienable by the State but are exclusively for the benefit of the Native Hawaiian people (are held in trust for). In addition, a huge fraction of the land is owned outright by the tax-exempt Bishop Estate (Kamehameha's personal lands) although it is mostly leased out for a term of years. Some Hawaiians hope that these land resources can form the land base for a new nation belonging to the Hawaiian people.
They believe that the Congressional Apology for the illegal overthrow of the Kingdom in 1893 is a prelude to reversal of the 1898 Annexation. No one, I believe, seeks an extralegal route to independence or Hawaiian Sovereignty. Hawaiians are considering several difference forms of government. In "A Nation in Nation" Hawaiians and their beneficial land might constitute a non-contiguous state that was treated as if it were a recognized Native American tribe. Each Hawaiian would have rights as a citizen of the Hawaiian Nation, as well as retaining his or her rights as an American citizen.
They would elect their representatives and magistrates, administer their laws, enjoy exemption from US and State taxes. There would usually be no barriers between Hawaiian land and US or Hawaii land. Everyone would be free to pass without clearing customs or immigration in either nation. The partitioning of the State into the Republic and the State could be done easily with no real complications at all. I think most residents would accept this solution as just and adequate.
I think it would permit very great prosperity. The Republic could adopt laws that would make these islands a blooming paradise. No tariffs -- a free trade paradise. No federal or state taxes. No army or navy (the Kingdom never had them -- except for a couple of toys).
The other models -- an independent state, for instance, have many more problems IMO.
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