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And Here Lawmakers Go Again Solving Problems With Taxes

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By Lowell L. Kalapa

(Released on 2/24/08)

We warned you that our elected officials lack the imagination and creativity to respond to problems with real, well-thought out solutions and instead fall back on their usual tried and true tax incentive thinking.

This legislative insanity knows no limits, as there are tax incentives for this and tax incentives for that. Many of these proposals under consideration are a result of the legislature’s inability to make hard decisions. For example, lawmakers feel sorry for taxpayers who give up their jobs in order to provide care for a disabled or elderly relative so they are considering a tax credit of up to $1,000 for the caregiver depending on the caregiver’s adjusted gross income.

While it sounds great and after all those care giving relatives gave up their jobs, lawmakers seem to fail to heed the stories reported in the media about elder abuse. They choose to ignore the fact that often times the perpetrator of elder abuse is the relative providing the care. And that’s the point they miss in just handing out free candy in the form of tax incentives, that there is no assurance that the care being provided is quality care. Ah, but this was one of the recommendations of the “aging-in-place” task force that they put together over the interim.

They seem to ignore that the cause of elder abuse is the stress under which the caregiver must labor 24/7 with a relative because the elder may not be completely competent. It has been pointed out that revenue forgone by handing out this tax credit might have provided respite care so the relative caregiver could drop off the elder once or twice a week to take time out from the stress of caring for that elderly relative.

Further revenue forgone in handing out the tax credit could instead be used to train the caregiver in how to provide quality care, from how to help a person stand up from a seated position to how to bathe the elderly relative. This is just one of the ways that the quality of care could be improved.

Then there is the proposal to slap an annual registration fee of $5,000 on all manufacturers of electronic products as a prerequisite to selling such devices in the state. This is supposedly to establish a recycling program for such products in the state. In addition to the annual fee, each electronic manufacturer would have to pay an additional fee based on the estimated weight of their devices times the cost per pound for collection, transportation, and recycling of the electronic devices plus submit a plan on how their devices will be recycled.

Perhaps lawmakers think those nice manufacturers will politely absorb the cost of these new registration and recycling fees out of the goodness of their heart or perhaps to be environmentally responsible. Dream on lawmakers! Manufacturers will decide that either they will not sell their products here or they will increase the cost of those products for, as we all know, if the manufacturer is to stay in business and make a profit, all the costs incurred will be passed along to the consumer.

Not only that, when manufacturers decide that they don’t want to pay the recycling fees and pull their products out of the state, what will retailers do? It will drive consumers who want a certain brand of electronic products to the Internet to shop for that brand which will probably be more than price competitive even with the shipping as that product will not be burdened with this new fee. So what are lawmakers thinking? That this is just another fee to help clean up the environment while driving consumers to vendors outside the state?

Come on lawmakers! Admit that this so-called fee is just another tax on consumers in Hawaii. Admit that this fee will merely prove what many businesses already know, that it is costly to do business in the state because lawmakers take such an anti-business attitude and obviously don’t care how heavy the burden of taxes and fees is for businesses and consumers.

Lawmakers like to accuse businesses of gouging consumers and making the cost of living so high for residents, but have they stopped to look in the mirror? They may have gotten away with imposing the bottle deposit fee, but now we are talking serious money here and guess who will end up paying for it? That’s right, you and me as consumers and taxpayers.

Lowell L. Kalapa is the president of the Tax Foundation of Hawaii. Mr. Kalapa’s commentary is printed each week in the Maui NewsWest Hawaii TodayGarden Isle News, and the HawaiiReporter.com.

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