Taxation Creeping from the Capitol Through the Hawaiian Islands

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BY MALIA HILL – How’s this for irony?  The Hawaii state legislature is facing a massive budget shortfall, caused in part by the burden of the state pension system.  In order to try to remedy this shortfall they are going to . . . wait for it . . . tax pensions.

And they say politicians have no sense of humor.


The pension tax was one of a series of taxes that passed the Hawaii House of Representatives last week, along with an increase in liquor levies, a cap on itemized deductions, and the phasing out of tax exemptions for certain businesses.  So, if you’re a business owner looking forward to retiring on your pension, you’re going to have to pay more for the stiff drink you’re going to want after looking at your tax bill.

All of the House Republicans voted against the pension tax hike, pointing out that this tax pulls the rug out from people who had made careful retirement plans.

And here’s where the irony gets so thick, you can almost hear Alanis Morisette tuning up a guitar in the background: the response from the Democratic representatives who voted for the tax?  That changed circumstances and the way things are now means that people can’t depend on their pensions.  Really.  Here’s the quote from Rep. Cindy Evans (D-Makalawena-Waimea): “We’ve got to tell young people that are entering the world of employment that what you see today isn’t possibly going to look the same 30 or 40 years from now when they get to retirement age. . . . There’s no such thing as security. You’ve got to plan for yourself”

No security?  Can’t depend on your pensions?  If only that meant that Rep. Evans was in favor of reforming the state pension system.  It sure would save a lot more money than the mere $35 million the state expects to gain from the pension tax.  The State Department of Education alone spends more than that on “Food Supplies.” But this legislature seems to think that the only untouchable pensions are the ones that are paid out of the taxpayers’ wallets.