The Tax Shell Game – GE Tax Cut for Giant Rail Tax-Shoots from the Grassroot Institute of Hawaii – Jan. 31, 2005

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It would be comical if it weren’t so serious.

Sad to say, it also a commentary on the contempt with which so many of this state’s legislators hold the general public. They are about to attempt to run another of their incredible shell games. And, I suppose, they are right, the people for the most part, will probably fall for it.


It actually predates this session. The bottle bill is an example. Currently, if I buy a case of V-8 from Sam’s Club, it comes in a shrink-wrapped box. There is no HI-5 cent sticker on each can because it comes in that shrink wrapped box and the stickers cannot be applied. (I questioned this at the store and was told there was nothing they could do.) So for every case of V-8 I buy, there is an un-redeemable $1.20 that goes into the state coffers. This is just another sales tax on top of the General Excise Tax (GET), call it what you will. Doesn’t matter what the purpose is, it is a tax.

Then, on the one hand we are being promised middle class tax relief. The ”’Honolulu Star-Bulletin”’ article “State Senate President Robert Bunda, D-Waialua, crafts a cut to rival Lingle’s plan to help the poor” dated January 20, 2005, begins, “Middle-class families in Hawaii would see big tax savings under a new proposal by state Senate President Robert Bunda.”

The article goes on to examine the various aspects of the so-called tax relief proposals. While there is nothing wrong with tax relief, there is something wrong with the misdirection that is at play here. As the penultimate sentence of the article notes in a quote from State Sen. Sam Slom, R-Hawaii Kai, “The House Democrats have proposals to increase the excise tax for mass transit . . .”

Then on the other hand, this brings us to the next article in the same issue of the same newspaper, titled, “Rail transit tax increase gets political momentum.” Here the focus is, as State Senate Transportation Chairwoman Lorraine Inouye, D-Hilo, is quoted as saying, “We’ll be looking at the increase in the general excise tax.”

And further in the article it states – Inouye’s staff said preliminary tax figures show the increase could generate an estimated $340 million to $400 million in additional annual revenues.

In other words, the Legislature wants to hand the public a $50 million tax relief package to then finance a $400 million dollar tax increase.

Seems like a fair trade, doesn’t it?

Give a tax break that will be offset by a 800 percent tax increase to finance another construction boondoggle.

What’s more, the tax increase is far more regressive than the tax relief package would be. Thus, the poorer in the community get a much higher comparative tax increase. And the middle class? Expect to get soaked.

That rail is a boondoggle that will not perform as advertised is beside the point. That the tax burden to fund it will add to an already burdensome tax load is. The supposed tax “relief” proposals that are taking place at the same time as a huge proposed increase in the overall tax burden is more than a joke, it is a travesty.

This is why I say that the politicians hold us in contempt. They don’t expect us to see through this ruse. And for the most part, I suppose they are correct. Considering the public school system here is failing, and most kids don’t learn to think or question, much less read, write or do arithmetic at grade level, most will likely not see the scheme.


”’Don Newman, senior policy analyst for the Grassroot Institute of Hawaii, Hawaii’s first and only free market public policy institute focused on individual freedom and liberty, can be reached at:”’

”’This editorial is intended to provoke thought, discussion and an examination of issues. It does not reflect official policy of the Grassroot Institute of Hawaii. See the GRIH Web site at:”’

”’ 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”’



Daily Policy Digest


Friday, Jan. 28, 2005

Cities and suburbs are facing budget shortfalls while demand for local services are increasing, leaving homeowners to foot the bill in the form of higher property taxes, say observers.

Many localities are trying to keep property taxes stable, but state funding cuts have prompted many to reassess home values yearly. Indeed, higher assessment values due to a booming housing market means that cities receive more tax revenues without having to raise tax rates:

Property taxes totaled $204.5 billion in 2004, a 7.9 percent increase from 2003 and a 30 percent increase from 2000.
Average property taxes on a 2,200-square foot home rose 21 percent over four years.
Danville, a suburb of San Francisco, experienced the highest property tax hike since 2000, at 57 percent.

However, homeowners aren