Interesting to note that Hawaii retains the position as the highest cost location to do business in all of the United States, even ahead of New York and California.

See report by the Milken Institute: “Hawaii is Most Expensive State To Operate a Business”

Of special note among the cost figure is the high cost of taxes and electricity.

With the recent Oahu General Excise Tax increase, both taxes and electricity costs will rise in 2007 even higher yet. You see, the full General Excise Tax of 4.5 percent will be levied on the fuel HECO burns to generate our electricity.

This high tax on a fuel input to electricity generation is thanks to a state tax department ruling that the fuel is “consumed” by HECO not technically converted to electricity and resold to consumers.

If fuel were viewed as a raw material input to the generation process it would be taxed at the wholesale 0.005 or half percentage rate.

Our politicians sure know how to hit consumers with the double whammy.

Is it any wonder the General Excise Tax is called the ”’stealth tax”’?

Is it any wonder not even our Honolulu Council Members can understand how different this General Excise Tax is from a sales tax?

”’Paul E. Smith, a resident of Honolulu, Hawaii, and a board member with the Tax Foundation of Hawaii and Grassroot Institute of Hawaii, can be reached via email at”’ mailto:peseps@aol.com

”’HawaiiReporter.com reports the real news, and prints all editorials submitted, even if they do not represent the viewpoint of the editors, as long as they are written clearly. Send editorials to”’ mailto:Malia@HawaiiReporter.com

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