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Tuesday, January 31, 2017
‘Challenging and exciting times’
By Grassroot Institute @ 6:07 PM :: 4583 Views :: Hawaii State Government, Taxes

‘Challenging and exciting times’

by Mark Coleman Grassroot Institute, Jan 30, 2017

In his State of the State address to the 2017 Hawaii State Legislature on Jan. 19, Gov. David Ige said that while we can’t predict the future, it is clear that “we are living in very challenging and exciting times.”

Looking for a moment at the glass as half empty, those challenging times include high shipping costs, high taxes, a high rate of public sector unionism, shaky government pension programs, inadequate housing supply and pervasive homelessness, excessive business and employment regulations, cronyism and corruption, lack of government transparency, over-criminalization of personal behaviors and (not surprisingly) over-crowded prisons, insufficient health care supply, and much more.

Hawaii leaders, indeed, are hard-pressed to adopt policies that can provide the opportunities that all Hawaii residents should have to enjoy maximum freedom and prosperity.

Some legislators, however, seem to think it would be fine to just keep piling on taxes and regulations.

Examples include legislative proposals that would:

>> Most egregiously, increase the general excise tax to 4.5 percent, to provide a dedicated funding source for the state Department of Education and the University of Hawaii.

>> Increase liquid fuel and vehicle weight and registration taxes, all via one bill.

>> Extend the 0.5 percent general excise tax surcharge on Oahu residents to help pay for construction of Honolulu County’s rail project, which now nobody knows how much will ultimately cost.

>> Double the so-called barrel tax imposed on distributors of imported petroleum products, to be paid ultimately by consumers, of course.

>> Establish a surcharge on visitor accommodations and residential investment properties, supposedly to help fund the state’s public education system but in reality more likely fund raises for members of the teachers union. The underlying assumption here seems to be that higher costs for visitor accommodations won’t affect tourism arrivals — Hawaii’s economic mainstay — and higher costs on “residential investments” won’t negatively affect their retired mom-and-pop owners, or the rental housing market.

>> Expand subsidies for Hawaii university students, which could make higher education free (or almost free) for some people but certainly not for Hawaii taxpayers.

>> Impose a tax on “sugar-sweetened beverages” — as a health measure, and for the keiki, of course.

>> Tax e-cigarettes — under the rubric that they are dreaded tobacco products, which they aren’t, and despite the ironic evidence that e-cigs help wean smokers away from actual tobacco products.

>> Increase the tax on cigars, which are a tobacco product, but which likely would lead to fewer cigars being sold and fewer taxes collected, threatening state health initiatives such as the University of Hawaii Cancer Center, which depends greatly on disbursements from the state tobacco fund.

A truly astonishing proposal would raise the minimum wage in just five years to $22 an hour — more than double the current $9.25. But why stop at $22 an hour; why not $100? (Just kidding.)

Questionable proposals aren’t limited to the economic realm. One measure would require presidential candidates to make public their tax returns or not be allowed on the Hawaii ballot starting in 2020. The state very likely would have to defend itself against this obviously vindictive law (President Donald Trump as plaintiff, anybody?), and that would cost Hawaii taxpayers even more.

Nickel-and-diming and just plain harassing Hawaii residents with these kinds of policies are not the kinds of responses Hawaii leaders should be offering to address the state’s challenging times — exciting though they may be.

Now, looking at glass as half full, the good news is that numerous bills have been introduced in the latest legislative session that would cut or repeal taxes (like the so-called death tax), ease business regulations, increase privatization, reform harsh criminal laws, increase government transparency, restore solvency to the state’s pension programs, encourage road pricing and generally aid Hawaii residents trying to stay afloat or improve their lives.

The citizens and leaders who have crafted these proposals deserve praise and thanks, and their ideas should be seriously considered.

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