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Bear of Truth Unfairly Criticized

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By Lowell L. Kalapa

It is indeed unfortunate that even today, as in ancient Greece, we kill the messenger even though it is the message that we don’t like. That appears to be the case when a recent national article didn’t have “nice things” to say about Hawaii’s economic and political environment.

While the tone and rhetoric of the recent Forbes article might have been a bit too inflammatory, perhaps it was necessary as more moderate and reserved delivery of the same message appears to have fallen on deaf ears. Putting the rhetoric aside, the facts are still there – Hawaii’s business and tax climate is one of the worst in the nation.

The article correctly points out that Hawaii residents start paying the maximum tax rate of 10% at a paltry income of $20,500 whereas New York City residents don’t start paying that rate of tax until well into the stratospheric income of $65,000. It makes note of the high rates of employment insurance and tax with which businesses have to cope, including workers’ compensation insurance and unemployment taxes. And of course, there is the inevitable criticism of Hawaii’s general excise tax which tends to add to the high cost of living and doing business in Hawaii because it is imposed on every transaction.

While the reaction from the respective viewpoints was as could be expected – affirmation by business and rejection by elected officials – one of the dailies appeared to have missed the point or at least only got half of the point. It noted in an editorial that while many of the criticisms were valid, it did not fully agree that Hawaii should jettison many of its laws which are designed to protect the fragile ecosystem and environment in which we live. It went on to say that there needs to be balance between reducing the protective barriers that stand in the way of a vibrant economy and those which insure that Hawaii remains the pristine paradise we all enjoy.

The point that the editorial writer missed and what elected officials tend to deny is that there is no balance and that in fact the pendulum is so far to one end that it begs a plea for the opposite extreme in order to get the pendulum back in balance. Obviously there is no balance between a free market economy and the overly burdensome laws with which businesses and workers have to cope.

If there were a sound balance, businesses wouldn’t be in bankruptcy and workers wouldn’t be looking desperately for work. If taxes weren’t so high perhaps there wouldn’t be a “brain drain” of our best and brightest kids who can command six-figure salaries that would otherwise be taxed at the maximum tax rate beginning at the first dollar after $20,500.

Who are we kidding when our elected officials deny the observations made by not only this latest report, but every report made about Hawaii’s business climate for the past decade? Obviously those who could have made a difference by changing some of those laws chose not to do so. As a result, Hawaii’s people have had to pay a very dear price.

While the editorial writer may have been concerned that the Forbes article called for the “rape and pillage” of Hawaii, one can only wonder how healthy an environment can it be when its people cannot find work and struggle to survive in “paradise?”

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