January 4, 2008 > Hawaii Free Press

Hawaii Daily News Read

Sunday, January 4, 2009

January 4, 2008
By Andrew Walden @ 9:39 PM :: 8374 Views

Rich claim 95% of tax credits for investing in Hawaii tech industry

(Closer, but still no names of the politicians and their donors who benefit from this scam....)

Those benefiting from the tax credits tend to be wealthy because securities laws restrict such private equity sales to high-net-worth individuals, said Jeff Au, managing director for Honolulu venture capital firm PacifiCap Management Inc.

That may be why only 123 taxpayers with annual incomes below $50,000 took advantage of the tax credit while 1,522 taxpayers with incomes of more than $100,000 used the credit.

The program also allows Hawai'i residents to double up on their tax credit by trading their investments with nonlocal investors. For example, a resident can invest $15,000 in a local company and get stock in that company. The local investor then finds a Mainland investor who doesn't pay Hawai'i income tax and doesn't need the tax credit. If the Mainland investor has also put $15,000 into the same company, the local investor can give her shares in the company to the Mainland investor and use the Mainland investor's tax credit.

The result is the local investor gets a $30,000 reduction in state income tax, and the Mainland investor gets double the stock for his or her $15,000 investment.

News about tax credit opportunities often is spread by word of mouth via a network of tax attorneys, accountants and venture capitalists. Investors also typically need to sign elaborate partnership agreements to receive the credits.

From 1999 through 2007, the technology investment tax credits cost the state an estimated $657.5 million in tax revenues, according to the tax department. Individual investors weren't the only ones claiming that money. In 2006, the latest year for which figures are available, individuals claimed $59.6 million in investment tax credits followed by insurance companies ($26.7 million), financial corporations ($10.2 million) and corporations ($8.5 million).

Pflueger arraignment set for Tuesday

LIHU'E, Kaua'i — Retired auto dealer James Pflueger is scheduled to appear in criminal court here at 9 a.m. Tuesday in connection with the 2006 Kaloko dam tragedy that killed seven people on Kaua'i's north shore. Pflueger was indicted Nov. 21 by a Kaua'i grand jury on seven counts of manslaughter and one count of reckless endangering. If convicted, he could be sentenced to up to 20 years in prison for each manslaughter charge.

Island foreclosure rate doubles in 2008

Last month, the foreclosure database RealtyTrac released its market report for November. It found that foreclosure filings -- default notices, auction sale notices and bank repossessions -- were reported on 259,085 properties nationwide. Of these, 393 foreclosures were in Hawaii.
There were 86 filings on the Big Island, 214 on Oahu, 19 on Kauai and 74 on Maui. Of the Big Island total, 13 were in Hilo, 10 in Waikoloa, 34 in Kailua-Kona, five in Waimea, seven in Keaau, 12 in Pahoa and one in Volcano.

SB: DOE seeks failing-school overhaul

Update: SB Editorial backs plan

Schools Superintendent Pat Hamamoto is seeking the power to replace teachers, principals and staff at some campuses that have been failing the No Child Left Behind law despite extra support to help them raise student achievement over the years.

A legislative proposal would let Hamamoto intervene at schools struggling the most to stay on track of the federal mandate's goal of having all students proficient in reading and math by 2014.

Board of Education Chairman Garrett Toguchi and Senate Education and Housing Chairman Norman Sakamoto say the idea is worth debating, but the leader of Hawaii's teachers union is skeptical.

"Everybody in the school leaves, everybody," Roger Takabayashi, president of the 13,000-plus member Hawaii State Teachers Association, said about the initiative....

(This explains why Rep. Mark Nakashima and Sen. Dwight Takamine are suddenly advocating a DoE restructuring which guts the power of the Superintendent in favor of many local Supers....)

Nursing home evicts millionaire Unitarian -- incident is excuse to demand socialized medicine

An 81-year-old woman confined to a wheelchair was evicted from a Nu'uanu nursing home and, with no permanent place to stay, was dropped off at the emergency room of a Honolulu hospital just days before Christmas. ...

"That's essentially the problem," he said. "There is no coherent system. There's this patchwork of private entrepreneurs, charity groups, nonprofits, state programs and some state laws that are virtually impossible to enforce."

LINK: Obama's church

Isle unit works to 'win peace' in Iraq

"Last time, we won the fight," Piatt said. "This time, we have to win the peace." (And now that Bush is gone, the media can admit it.)

Big Isle mayor revives Puna highway project

Big Island Mayor Billy Kenoi kept the concept alive last month with a request for $2 million for the project as part of a $487 million wish list for federal economic stimulus funds.

The Puna Makai road would serve an area expected to be home to 53,000 people by 2030. Only one highway now leads in and out of the area, and the uncertainty of the situation was shown in 2007 when lava flows temporarily appeared to be a possible threat to the highway.

Cuts to mental health budget could impact county services

Janice Okubo, spokeswoman for the Department of Health, said Friday the state is not cutting the Adult Mental Health Division's budget. The state is simply not going to cover an estimated $25 million shortfall in the division's budget this year, she said.
Gov. Linda Lingle, according to a prepared statement found on the Adult Mental Health Division's Web site, requested all state departments to cut their budgets in 2008 in preparation for a projected $1.1 billion budget shortfall in fiscal year 2010-11.