Tax Increase Idea Slammed At Legislative Hearing

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BY JIM DOOLEY – The state Tax Review Commission heard unanimous opposition today to a suggested increase in the state general excise tax.

Graphic illustration by Emily Metcalf

Commissioners, who meet every five years, repeatedly told an audience at the Capitol that the tax increase idea has not been adopted and is merely a recommendation from consultants.


Legislators, businesses and retirees were among the opponents who delivered testimony against the consultant’s proposed ½ per cent increase in the state general excise tax.

Twenty-nine Democratic members of the state House of Representatives signed a letter to the commission that said they are against the GET or other possible increases.

“We feel that such a significant net tax increase probably will be detrimental to private businesses, residents, or both, and that (the consultant) has not sufficiently analyzed the impact of the tax increase on the economy, businesses, and residents,” the letter said.

Among the signers were House Speaker Calvin Say, D-20th Dist. (St. Louis Heights – Kaimuki), and Rep. Marcus Oshiro, D-39th Dist. (Wahiawa – Launani Valley),  chairman of the powerful House Finance Committee, who also submitted a second letter of opposition to the tax hike idea.

House Republicans signed a letter expressing “vehement” opposition to tax increases.

“We find these recommendations, as well as others in the report, disappointing and disagreeable,” said the letter.

The most pointed criticism of the consultant report came from Lowell Kalapa, head of the Tax Foundation of Hawaii.

He said the analysis, performed by a Mainland firm called Public Finance Management, betrayed a fundamental misunderstanding of the general excise tax.

“It is a study that you should not accept,” Kalapa told the Commission.

Commission chairman Randall Iwase took issue with an essay written by Kalapa and published yesterday by Hawaii

Lowell Kalapa

Reporter that criticized the consultant report.

Iwase said the essay contained “hyperbole or over-the-top comments that really are insulting.”

Kalapa told Iwase he considered the report  “a waste of money.”

“I don’t know what they spent their time on but I certainly wouldn’t hire them again,” Kalapa said.



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Jim Dooley joined the Hawaii Reporter staff as an investigative reporter in October 2010. Before that, he has worked as a print and television reporter in Hawaii since 1973, beginning as a wire service reporter with United Press International. He joined Honolulu Advertiser in 1974, working as general assignment and City Hall reporter until 1978. In 1978, he moved to full-time investigative reporting in for The Advertiser; he joined KITV news in 1996 as investigative reporter. Jim returned to Advertiser 2001, working as investigative reporter and court reporter until 2010. Reach him at