Thursday, January 26, 2023
Hawai'i Free Press

Current Articles | Archives

Friday, October 14, 2016
How much money are we "tipping" the government?
By Keli'i Akina PhD @ 10:23 PM :: 5226 Views :: Ethics, Rail, Taxes

How much money are we "tipping" the government?

by Dr Keli'i Akina, Grassroot Institute

My friends who work in Hawaii's tourism industry tell me that locals are famously generous. Maybe it's because everyone has an auntie or uncle at a hotel or restaurant, but as a rule, people from Hawaii are known as good tippers. We're so good, in fact, that the state government has decided they deserve a tip for doing their job. And because it's the government, they don't leave a jar on the Governor's desk. They just "forget" to bring the taxpayers their change.

If you haven't guessed, I'm referring to the habit the state Department of Taxation has of keeping the money that is left over after they process the rail surcharge. Back when the surcharge was passed, DOTAX told the legislature that the cost of administering the new tax would require extra effort for them in the form of man hours, equipment, and the like. The legislature, seeing the logic of this, authorized DOTAX to collect 10% of the surcharge in order to offset these costs. The Department was supposed to calculate how much they used, keep that amount, and return the rest to the countyto help pay for the rail project.

They did pretty well on the "keeping and collecting" part, but forgot about calculating and returning the extra.

And because this is a county-wide tax, we're not talking about pennies. The Tax Foundation of Hawaii estimates that the 10% administrative fee represents more than $177 million. Lest you think that it must be really expensive to administer a 0.5% GET surcharge, the amount retained every year by DOTAX to manage the surcharge is roughly equal to its annual budget.

In fairness, DOTAX isn't claiming that they need all that money to do their job. They are simply saying that they don't have to give back the excess. In essence, DOTAX has "kept the change" to the tune of about $150 million. They also say that they aren't required to calculate the cost of administering the surcharge, which is certainly convenient for them, as it prevents the legislature from having hard data to revise that 10% down to a more accurate number.

If this is how our taxpayer dollars are managed, it is no wonder that the Rail project is in total disarray. Moreover, the next legislative session will doubtless include a plea for more funding--perhaps in the form of an extended (or higher) surcharge. Which would then, of course, mean more money in "administrative fees" to pad the DOTAX budget.

This is pretty much the opposite of transparent and accountable government. Fortunately, the Tax Foundation of Hawaii is currently suing the state in the effort to put an end to this practice. If they win, DOTAX will only be permitted to keep the amount needed to administer the surcharge.

Because as generous as Hawaiians may be, nobody paying the excise tax thought that DOTAX deserved a little something extra on the side.

E hana kakou (Let's work together!),

Keli'i Akina, Ph.D.



TEXT "follow HawaiiFreePress" to 40404

Register to Vote


808 Silent Majority

ACA Signups Hawaii

Alliance Defending Freedom

Aloha Pregnancy Care Center

American Council of Trustees and Alumni


Antonio Gramsci Reading List

A Place for Women in Waipio

Astronomy Hawaii

Back da Blue Hawaii

Ballotpedia Hawaii

Better Hawaii

Broken Trust

Build More Hawaiian Homes Working Group

Christian Homeschoolers of Hawaii

Cliff Slater's Second Opinion

DVids Hawaii


Fix Oahu!

Frontline: The Fixers

Genetic Literacy Project

Grassroot Institute

Hawaii Aquarium Fish Report

Hawaii Aviation Preservation Society

Hawaii Catholic TV

Hawaii Christian Coalition

Hawaii Cigar Association

Hawaii Coalition Against Legalized Gambling

Hawaii ConCon Info

Hawaii Credit Union Watch

Hawaii Crop Improvement Association

Hawaii Debt Clock

Hawaii Defense Foundation

Hawaii Family Forum

Hawaii Farmers and Ranchers United

Hawaii Farmer's Daughter

Hawaii Federalist Society

Hawaii Federation of Republican Women

Hawaii Future Project

Hawaii Gathering of Eagles

Hawaii History Blog

Hawaii Homeschool Association

Hawaii Jihadi Trial

Hawaii Legal News

Hawaii Legal Short-Term Rental Alliance

Hawaii Matters

Hawaii's Partnership for Appropriate & Compassionate Care

Hawaii Public Charter School Network

Hawaii Rifle Association

Hawaii Shippers Council

Hawaii Smokers Alliance

Hawaii State Data Lab

Hawaii Together



Hiram Fong Papers

Homeschool Legal Defense Hawaii

Honolulu Navy League

Honolulu Traffic

House Minority Blog

Imua TMT

Inouye-Kwock, NYT 1992

Inside the Nature Conservancy

Inverse Condemnation

Investigative Project on Terrorism

July 4 in Hawaii

Kakaako Cares

Keep Hawaii's Heroes

Land and Power in Hawaii

Legislative Committee Analysis Tool

Lessons in Firearm Education

Lingle Years

Malulani Foundation

Managed Care Matters -- Hawaii

Malama Pregnancy Center of Maui

Military Home Educators' Network Oahu

Missile Defense Advocacy

MIS Veterans Hawaii

NAMI Hawaii

National Christian Foundation Hawaii

National Parents Org Hawaii

NFIB Hawaii News

No GMO Means No Aloha

Not Dead Yet, Hawaii

NRA-ILA Hawaii

Oahu Alternative Transport


OHA Lies

Opt Out Today

Patients Rights Council Hawaii

PEACE Hawaii

People vs Machine

Pritchett Cartoons

Pro-GMO Hawaii


Rental by Owner Awareness Assn

ReRoute the Rail

Research Institute for Hawaii USA

Rick Hamada Show

RJ Rummel

Robotics Organizing Committee

Save Dillingham Airfield

School Choice in Hawaii

Sink the Jones Act

Statehood for Guam

Talking Tax

Tax Foundation of Hawaii

The Real Hanabusa

Time Out Honolulu

Trustee Akina KWO Columns

UCC Truths

US Tax Foundation Hawaii Info

VAREP Honolulu

West Maui Taxpayers Association

What Natalie Thinks

Whole Life Hawaii