Thursday, November 21, 2024
Hawai'i Free Press

Current Articles | Archives

Sunday, September 29, 2019
They’re Taking Their Business Elsewhere
By Tom Yamachika @ 5:00 AM :: 5243 Views :: Hawaii Statistics, Small Business, Taxes

They’re Taking Their Business Elsewhere

by Tom Yamachika, President, Tax Foundation Hawaii

A few months ago, we tried to remind folks about “It’s the Economy, Stupid.” There we reported that we had been getting lots of news about our economy, and none of it was good.

This month, the University of Hawaii’s economics research organization, UHERO, released its third quarter economic outlook on Hawaii. The title of the paper wasn’t exactly comforting: “Already Weak, Hawaii’s Prospects Look Increasingly Dicey.”  “All told,” the report stated, “the outlook is for Hawaii to tread water over the next few years, vulnerable to waves that could well pull us under.”

What has gotten us to this point? One problem is our population, which fell in both 2017 and 2018. This decline isn’t simply due to reassignment of active duty military. As multiple news sources have been confirming, people have been, and are, leaving our fair shores. “[L]ikely responding to better work opportunities and lower living costs on the US mainland,” the UHERO study says.

Policymakers take note! We, among many others, have long warned that if government squeezes our population too hard with taxes, regulations, and other impediments, people will vote. Not necessarily at the ballot box, but with their feet. UHERO has looked at the hard numbers, and they see that people are in fact taking their business elsewhere. Are you concerned about population decline? Or about “brain drain”? Then don’t deny the problem any longer. We need to do something about our cost of living. And by the way, what happens when the cost of government stays the same but the number of people contributing to that cost decreases? More cost per person results, which adds pressure to lawmakers to increase taxes and jack up our cost of living even more.

Can the problem be solved by squeezing our tourism industry further instead of our general population? UHERO observed that the number of visitors in Hawaii on a typical day is flatlining, and visitor spending is trending downward. They are seeing “a sharp pullback in international markets, where the number of visitor days has declined across all major market segments.” More visitors may be arriving, but they are spending less. Translation: Tourists are taking their business elsewhere as well. Some of that may be due to federal action such as increased tariffs and strength of the dollar relative to other world currencies, but we probably are already at the point where further squeezing of the visitor market gives us economic trouble.

On that front, the recent political spats about transient vacation rentals and the resulting crackdowns in Honolulu, Maui, and other counties have already put a big dent in the supply of places where tourists can be housed. UHERO says that the crackdown on Oahu alone caused a greater than 8% drop in Oahu’s overall number of units available for visitor accommodations. Maybe some or many of those places were illegal in the first place, but the economic result is in any event further squeezing that industry sector. Now isn’t the right time to attack it further.

As policymakers begin their annual debate on how to finance government, they should consider that most of our tax laws depend on business activity. When the economic engine we call business makes money, they make money. Are we going to put more brakes on the engine with more taxes, fees, and regulations? Instead, we should be bending over backwards to find ways to help the engine spin faster.

Links

TEXT "follow HawaiiFreePress" to 40404

Register to Vote

2aHawaii

Aloha Pregnancy Care Center

AntiPlanner

Antonio Gramsci Reading List

A Place for Women in Waipio

Ballotpedia Hawaii

Broken Trust

Build More Hawaiian Homes Working Group

Christian Homeschoolers of Hawaii

Cliff Slater's Second Opinion

DVids Hawaii

FIRE

Fix Oahu!

Frontline: The Fixers

Genetic Literacy Project

Grassroot Institute

Habele.org

Hawaii Aquarium Fish Report

Hawaii Aviation Preservation Society

Hawaii Catholic TV

Hawaii Christian Coalition

Hawaii Cigar Association

Hawaii ConCon Info

Hawaii Debt Clock

Hawaii Defense Foundation

Hawaii Family Forum

Hawaii Farmers and Ranchers United

Hawaii Farmer's Daughter

Hawaii Federation of Republican Women

Hawaii History Blog

Hawaii Jihadi Trial

Hawaii Legal News

Hawaii Legal Short-Term Rental Alliance

Hawaii Matters

Hawaii Military History

Hawaii's Partnership for Appropriate & Compassionate Care

Hawaii Public Charter School Network

Hawaii Rifle Association

Hawaii Shippers Council

Hawaii Together

HiFiCo

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

July 4 in Hawaii

Land and Power in Hawaii

Lessons in Firearm Education

Lingle Years

Managed Care Matters -- Hawaii

MentalIllnessPolicy.org

Missile Defense Advocacy

MIS Veterans Hawaii

NAMI Hawaii

Natatorium.org

National Parents Org Hawaii

NFIB Hawaii News

NRA-ILA Hawaii

Obookiah

OHA Lies

Opt Out Today

Patients Rights Council Hawaii

Practical Policy Institute of Hawaii

Pritchett Cartoons

Pro-GMO Hawaii

RailRipoff.com

Rental by Owner Awareness Assn

Research Institute for Hawaii USA

Rick Hamada Show

RJ Rummel

School Choice in Hawaii

SenatorFong.com

Talking Tax

Tax Foundation of Hawaii

The Real Hanabusa

Time Out Honolulu

Trustee Akina KWO Columns

Waagey.org

West Maui Taxpayers Association

What Natalie Thinks

Whole Life Hawaii