Saturday, November 16, 2019
Hawai'i Free Press

Current Articles | Archives

Friday, June 14, 2019
Hawaii needs a handy ‘adjust policy’ tab
By Grassroot Institute @ 4:37 AM :: 1037 Views :: Economy

Hawaii needs a handy ‘adjust policy’ tab

Hawaii needs a handy ‘adjust policy’ tab

by Keli'i Akina, Ph.D.Grassroot Institute, June 14, 2019

I just gave Hawaii the best economic outlook in the country, and all it took was a few mouse clicks.

Typically, Hawaii ends up in the bottom half among all states in the many surveys of economic freedom and outlook. For example, the Economic Freedom of North America report, issued annually by the Canada-based Fraser Institute, placed Hawaii at 37th among the states for economic freedom in 2018. The national Tax Foundation’s 2019 State Business Tax Climate Rankings listed Hawaii as 38th. And the 2019 edition of Rich States, Poor States: ALEC-Laffer State Economic Competitiveness Index, issued by the American Legislative Exchange Council Center for State Fiscal Reform,ranked Hawaii at 45th.

These ranking systems weigh different factors, but they all come to one conclusion: Hawaii’s tax policies and regulations affecting business, labor and the economy discourage economic growth.

The same problems are pointed out over and over again: its high top marginal income tax rate, regressive general excise tax, extensive regulation and general lack of labor market freedom.

These studies are meant to show policymakers how taxes and other government policies and programs can affect the economic outlook of a state. Sometimes, however, the results can be a bit abstract.

So the Rich States, Poor States index did something interesting this year: It added a feature that gives you the opportunity to see what happens when you change a state’s policies. Every state’s page on the Index website has an “Adjust policies” tab that lets you change everything from the state’s income tax rates to its legal minimum wage.

So I decided to see what I could do to put Hawaii in the top 20.

I slashed the top marginal personal income tax rate, reduced the top marginal corporate income tax rates and cut property taxes. I lowered the general excise tax and the “remaining tax burden.” I got rid of the estate tax, made Hawaii a right-to-work state and made the state’s income tax slightly less progressive.

That took the Aloha State to 17 overall, and I did it without cutting government jobs or touching the minimum wage.

Getting Hawaii to No. 1 required more radical action. I had to significantly reduce the tax burden across the board, roll back all newly legislated tax changes and reduce the heavy proportion of public employees per 10,000 population.

Obviously, these weren’t realistic changes, considering the current political climate, but they helped demonstrate how Hawaii has slowly been shackling itself with policies that hamper its economic outlook.

So I tried something else: I enacted some of the changes the state Legislature has proposed in recent years.

I bumped up the general excise tax burden slightly to mimic the surcharges that have been proposed to fund education or kupuna (elder) care. I raised the minimum wage to $17 an hour and added more public employees to mimic the state’s barriers to privatization. I nudged property taxes and corporate income taxes up slightly, and added a few more minor taxes — think of it as contributing to the highway fund or other projects.

The results? Hawaii slid down to 49th overall in economic outlook. It might have been worse, but in some of those categories (like “sales tax” burden), it was already 50th and couldn’t lose any more ground.

As fun as it was to play with the policy adjuster and make Hawaii into a richer or poorer state, there is a lesson to be found here.

Hawaii’s economic outlook isn’t something that comes from a single big gesture. The state’s prosperity is based on hundreds of intertwined laws and regulations, touching everything from labor to fuel supply. They all affect whether Hawaii residents will be able to thrive and enjoy living in what many consider to be “paradise,” or they will cause lower economic growth and a higher cost of living, forcing ever more people to leave the state, as they have been doing in greater numbers for the past several years.

The next time Hawaii’s legislators start looking at a new tax or regulation, I hope they break out the Rich States, Poor States policy adjuster and see if they would be sending us in the right direction.

 

Links

TEXT "follow HawaiiFreePress" to 40404

Register to Vote

2aHawaii

808 Silent Majority

808 State Update AM940

ABCDEFG Blog

ACA Signups Hawaii

ACCE

ALEC

Alliance Defending Freedom

Aloha Life Advocates

Aloha Pregnancy Care Center

American Council of Trustees and Alumni

American Mothers of Hawaii

AMVETS-Hawaii

AntiPlanner

Antonio Gramsci Reading List

A Place for Women in Waipio

Audit The Rail

Ballotpedia Hawaii

Better Hawaii 

Blaisdell Memorial Project

Broken Trust 

Build More Hawaiian Homes Working Group

CAFR Hawaii

Castaway Conservative

Children's Alliance Hawaii

Children's Rights Institute

ChinaTownWatch.com

Christian Homeschoolers of Hawaii

Citizens for Recall

Cliff Slater's Second Opinion

Coffee Break

Conservative Forum for Hawaii

CSIS Pacific Forum

DAR Hawaii

DeedySupport.com

DVids Hawaii

E Hana Kakou Kelii Akina

E Māua Ola i Moku o Keawe

Farmers For Choice Hawaii

FIRE

Fix Oahu!

Follow the Money Hawaii

Frank in Hawaii

Front Page Magazine

Frontline: The Fixers

Genetic Literacy Project

Get Off Your Butts!

God, Freedom, America

Grassroot Institute

Habele.org

Hawaii Aganst Assisted Suicide

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 Crime Victims' Rights

Hawaii Crop Improvement Association

Hawaii Debt Clock

Hawaii Defending Marriage

Hawaii Defense Foundation

Hawaii Families for Educational Choice

Hawaii Family Advocates

Hawaii Family Forum

Hawaii Farmers and Ranchers United

Hawaii Farmer's Daughter

Hawaii Federalist Society

Hawaii Federation of Republican Women

Hawaii Firearm Community

Hawaii Fishermen's Alliance

Hawaii Future Project

Hawaii Gathering of Eagles

Hawaii History Blog

Hawaii Homeschool Association

Hawaii Jihadi Trial

Hawaii March for Life

Hawaii Meth Project

Hawaii's Partnership for Appropriate & Compassionate Care

Hawaii Public Charter School Network

Hawaii Rifle Association

Hawaii Right to Life -- Big Island

Hawaii Right to Life -- Oahu

Hawaii Shield Law Coalition

Hawaii Shippers Council

Hawaii Smokers Alliance

Hawaii State Data Lab

Hawaii Together

Heritage Foundation

HI Coalition Against Legalized Gambling

HIEC.Coop 

HiFiCo

Hiram Fong Papers

Homeschool Legal Defense Hawaii

Honolulu Homeless Crisis

Honolulu Navy League

Honolulu Traffic

Horns of Jericho Blog

House Minority Blog

House Republican Caucus YouTube

HPACC

Hump Day Report

I Vote Hawaii

If Hawaii News

Imua TMT

Inouye-Kwock, NYT 1992

Inside the Nature Conservancy

Inverse Condemnation

Investigative Project on Terrorism

Iowa Meets Maui

Jackson v Abercrombie

Jihad Watch

Judgepedia Hawaii

July 4 in Hawaii

Kahle v New Hope

Kakaako Cares

Kau TEA Party

Kauai Co GOP

Keep Hawaii's Heroes

KeyWiki

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

Mauna Kea Recreational Users Group

MentalIllnessPolicy.org

Middle East Forum--The Legal Project

Mililani Conservatives for Change

Military Home Educators' Network Oahu

Missile Defense Advocacy

MIS Veterans Hawaii

Muslim Brotherhood in America

NAMI Hawaii

NARTH

Natatorium.org

National Christian Foundation Hawaii

National Parents Org Hawaii

National Wind Watch

New Zeal

NFIB Hawaii News

No GMO Means No Aloha

Northwest Economic Policy Seminar

Not Dead Yet, Hawaii

Now What I Really Think

NRA-ILA Hawaii

Oahu Alternative Transport

ObamaCare Abortion Hawaii

Obookiah

OHA Lies

Opt Out Today

OurFutureHawaii.com

Pacific Aviation Museum

Patients Rights Council Hawaii

PEACE Hawaii

People vs Machine

Pritchett Cartoons 

Pro-GMO Hawaii

P.U.E.O.

RailRipoff.com

Rental by Owner Awareness Assn

Republican Party -- Hawaii State

Research Institute for Hawaii USA

Rick Hamada Show

RJ Rummel

Robotics Organizing Committee

Salvage The Rail

Save the Plastic Bag

School Choice in Hawaii

SenatorFong.com

SIFE Remington

SIFE W. Oahu 

Sink the Jones Act

Smart About Marijuana--Hawaii

St Marianne Cope

State Budget Solutions Hawaii

State Policy Network

Statehood for Guam

Tax Foundation of Hawaii

The Harriet Tubman Agenda

The Long War Journal

The Real Hanabusa

Time Out Honolulu

Truth About Trade & Technology - Hawaii

UCC Truths

Union Members Know Your Rights

US Tax Foundation Hawaii Info

Valor in the Pacific

VAREP Honolulu

Waagey.org

West Maui Taxpayers Association

What Natalie Thinks

Whole Life Hawaii

Yes2TMT