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An Insult Thrown at Taxpayers

posted in: Weekly Commentary 0
By Lowell L. Kalapa

Here we go again! Let’s raise taxes so we can lower them, at least that has been the MO of this administration.
First it was the recommendation of the Economic Revitalization Task Force where in order to lower income tax rates, we had to raise the general excise tax rate. Now the scheme is to double liquor tax rates so the capital gains tax rate can be lowered along with the inheritance tax. Whatever happened to the idea of just lowering taxes without having to make up the loss of tax revenues?
Forget the fact that Hawaii ranks among the top five states in the nation with the highest per capita tax burden. Forget the fact that Hawaii has some of the highest tax rates on alcoholic beverages. Forget the fact that a lot of people have jobs which depend on alcoholic beverages, from warehouse people to bartenders to waiters and waitresses.
So the argument is that by raising the tax, it will discourage consumption and therefore some of the social ills that stem from drinking will diminish. And if consumption does go down, what does that do for collections? If that is really true, then lawmakers can’t count on collections doubling to cover the cost of the proposed tax cuts. Conversely, if lawmakers believe that they will need the doubled amount of collections, then they better encourage their constituents to keep on drinking. So much for that argument.
Taxpayers can see right through an inane argument like that. They should also find that kind of argument insulting. Instead of raising taxes, lawmakers need to take a good hard look at how the taxes currently collected are spent. Could such a review produce as many horror stories as the recent legislative investigation into the Felix situation? Many taxpayers have their own horror stories of how state tax dollars are being wasted, yet it seems lawmakers are more willing to ignore such reports in favor of just raising more money to cover up those shortcomings.
Not only are state officials proposing to raise taxes, but they are also looking for stashes of money that they can get their hands on to make up the shortfall. One of those targets is the state hurricane relief fund which by recent reports has more than $200 million. While some may shrug their shoulders and say, use it because it is there and we need to keep government operating, they seem to overlook the fact that taking that money is only a one-time fix. What happens if the economy is still in the tanks the following year? Where will lawmakers and state officials then get the money to keep the state government going?
No, lawmakers need to take a long, hard look at what can be done to make government work with what resources there are. If Hawaii is already one of the most taxed states, raising taxes is not going to make the situation any better. It also means that the problem is on the spending side and not on the tax side as the per capita burden is already one of the heaviest.
Some lawmakers may say, “Okay, where do we cut or which program should be cut?” While there may be programs that are questionable, it does not have to be a matter of eliminating public services. The question that should be asked by lawmakers is whether or not there is a more efficient way to deliver those services. Another question that lawmakers should ask is whether or not some of the government regulations and rules imposed are really necessary or do they merely make it more expensive and difficult for people to do business, work, or play in Hawaii.
In fact, lawmakers should ask whether or not a state department or agency is operating in the role that benefits the public. For example, there is the department of business, economic development and tourism. Some businesses question its worth to the business community. It doesn’t advocate for business within state government. It doesn’t inquire what businesses need to survive in Hawaii.
The same can be said about the department of agriculture. Instead of being a promoter of agriculture in Hawaii, it is a regulator. Instead of showing off what Hawaii has to offer, it regulates the agricultural industry. Instead of being a booster for Hawaii products, it finds things wrong with the industry.
Instead of scrounging to find new ways to beat up the taxpayer, lawmakers should begin to look at the operation they are charged with monitoring and hold that system accountable for the tax dollars spent.

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