Memo to reluctant legislators: Hawaii can afford to cut taxes

by Grassroot Institute of Hawaii, March 30, 2023

Gov. Josh Green’s Green Affordability Plan is  being hailed as one of the biggest tax reductions in the history of the state, if it goes through, and the Grassroot Institute of Hawaii sponsored two well-attended luncheon panel discussions last week to consider its implications.

The first of the two events was on Maui on March 21 and featured Seth Colby, tax and research planning officer at the Hawaii Department of Taxation, and Joe Pluta, president of the West Maui Taxpayers Association. Joe Kent, executive vice president of the Grassroot Institute of Hawaii, moderated.

The second took place the following day on Oahu and featured Colby and Luis Salaveria, director of the state Department of Budget and Finance. Keli‘i Akina, Institute president and CEO, moderated.

At both events, Colby said the GAP plan will mean more money for every Hawaii-based taxpayer, but most affected will be families living at or below the federal poverty line of around $34,000 for a family of four, and ALICE (asset limited, income constrained and employed) families that make between $50,000 and $100,000, but do not receive as many social services.

Kent questioned how the plan might fare if Hawaii enters a recession. Colby said Hawaii could have a recession and still cut taxes.

Pluta said he would favor a tax cut either way.

“I would take the road to get rid of government regulations and get out of the way and let the economy take care of itself,” he said, earning cheers from the audience.

Regarding the nuts and bolts of the GAP plan, Pluta said, “Most people on Maui don’t understand any of this, but it’s music to their ears about anything that’s going to lower taxes.”

During the Oahu discussion, Akina asked Salaveria if the state can afford the tax cuts.

“Simply, yes,” Salaveria replied. “In fact, I will go as far as to say that we can’t afford not to do it because really, what we’re sitting on right now, are unhealthy ending balances. When you’re growing ending balances [a budget surplus], if you own a business, and you see that you’re just sitting on cash, and all you’re doing is sitting on cash, you’re not putting that money to work, whether it’s in increasing government services, or whether it’s providing tax relief.”

To see either of the presentations, which included Q&A sessions with the audiences, click on the videos below….