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http://hawaiitribune-herald.com/news/loc...egislature
He said the county has taken the responsibility for the county roads
Technically true, but...
Kenoi also asked for support for 36 new civil defense sirens using new satellite technology.
Satellite means "recurring subscription cost", doesn't it? Savings?
support for allowing the counties to increase the General Excise Tax
Ah, here we are: instead of fixing "irregularities" in the existing property tax system, let's just tax everyone, even if it's regressive for the lower-income parts of the island -- I would consider supporting an increase if food and medication were made retail-GET-exempt as part of the deal. (If this causes the GET increase to be revenue-neutral, then we have other problems already.)
Sen. Lorraine Inouye, D-North Hawaii, said she favored sharing the Transient Accommodations Tax with the counties, but only if it was used to enhance facilities used by tourists.
Hmm. So where is that money being spent today? Anyone?
cutbacks in the counties’ share of the Transient Accommodations Tax
Rather than having the State collect all these taxes, then give (some of, to be revised downward each budget) the money back to Counties, how about a "free market" approach: make TAT a County function, let counties compete for tourist dollars and/or enforce vacation rentals as they see fit...
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Billy has joined three other county in asking for authority to increase the GET up to 1% That will be a 25% tax increase applicable on the wholesale and retail level. It is a big increase. Why do we need a huge tax increase, Mayor Kenoi?
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Let's not get hysterical here...It's an increase in the tax *rate* by 25%, but it's a 1% tax increase. We're talking an additional buck for every $100 spent. Most jurisdictions have sales taxes in the 5-7% range, so the increased GET isn't out of line. Having said that, I'd prefer it stay where it is.
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quote:
Originally posted by KeaauRich
Let's not get hysterical here...It's an increase in the tax *rate* by 25%, but it's a 1% tax increase. We're talking an additional buck for every $100 spent. Most jurisdictions have sales taxes in the 5-7% range, so the increased GET isn't out of line. Having said that, I'd prefer it stay where it is.
Most places have a sales tax, but that is a tax on retail sales only. The 4% GET is applied to every transaction, every step of the way, from landing in Hawaii until the item is sold to the end user. For something like building a house it jacks the price way up, and can increase your costs measurably. That application of the tax again and again on one item creates a "Paradise Tax" that really adds up. Plus, Hawaii applies the GET to food, prescription drugs and medical care. I have had bills for medical procedures where the GET I had to pay was more than my share of the bill, because it was applied to the initial billing amount, not the lower amount the insurance company negotiates to finally pay. As it is structured in Hawaii the GET is very regressive, and hurts the middle class more than anyone.
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As shockwave rider points out, it's a hidden tax most of us never see. Taxed at the wholesaler, taxed on the shipping costs, and then charged 4.16% at the retail level because the state taxes the tax. That's right, if the store sells you $100 worth of goods, and taxes you 4%, the state taxes the store on $104.00 worth of "sales."
The actual tax rate we pay is already far higher than 4%.
"I'm at that stage in life where I stay out of discussions. Even if you say 1+1=5, you're right - have fun." - Keanu Reeves
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GET is a gross receivables tax on all business income; retailers have the option of passing it along to the consumer at the point of sale (the extra 0.166 is 4%-of-4%).
A mid-1980s Hawaii State Tax Review Commission concluded that if the GET were replaced with a simple "sales tax", that rate would need to be closer to 20%.
Source: Chapter 16: "Excise Taxes", The Price of Paradise, ISBN 1-56647-016-1. See also Chapter 17: "Taxing Food and Medical Care" (only Hawaii taxes all food; only New Mexico also taxes healthcare).
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"Unlike a sales tax, the GET is levied on the seller and not the purchaser."
Levied simply means collected by, and 4% is a fallacy, the last guy always ends up paying the whole bill.
kalakoa is correct. "if the GET were replaced with a simple "sales tax", that rate would need to be closer to 20%."
It works like this; I hire a contractor for $1,000 to clear my lot, he pays $40.00 tax on that. He hires a trucker for $500 to haul the stuff away, the trucker pays $20. tax. The trucker rents the truck for $400. and the truck renter pays $16. tax. The contractor also hires an excavator to load the truck for $300 and pays $12. tax who in turn rents the excavator for $200 and pays $8. tax. There is also $100 in fuel used producing $ 4. excise tax.
$40. + $ 20 + $ 16 + $ 12 + $ 8. + $ 4. = $100 + $4. tax on the tax $104. generated on a $ 1,000 job or 10.4% in tax. Add in the bookkeeper, mechanic etc. The rate gets higher. (20% ?!)
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quote:
Originally posted by Peter Easterling
Billy has joined three other county in asking for authority to increase the GET up to 1% That will be a 25% tax increase applicable on the wholesale and retail level. It is a big increase. Why do we need a huge tax increase, Mayor Kenoi?
In a word - Infrastructure.
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Infrastructure.
If I believed that any of this "infrastructure" would actually be built in the area "near my house", I would be more than happy to pay higher taxes to support that construction.
Especially if that "infrastructure" were in the form of a fiber broadband network.
As an example of why I don't believe this: Mayor Caldwell wants to extend Oahu's half-cent GET surtax, which was supposed to sunset in 2022 after it had raised enough money for the rail system. If "they" can't manage a single infrastructure project on the state's most populous island (with all the tax base that implies), I can only imagine what Kenoi would fail to accomplish with that same level of funding.
How about auditing the existing tax structure to figure out how much money is going uncollected before raising taxes on those who can least afford to pay? Improperly applied "ag exemptions" are costing us plenty, no need to raise the rates...
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The Hawaii GET is similar to European VAT (Value Added Tax) in that it is applied to every layer and level of the economic chain. As such, it is the most regressive of all taxes, falling heaviest upon those who have to spend the highest proportion of their incomes on necessities. Billy Kenoi is a typical machine politician who can't pass up an opportunity to increase the size and power of the machine he leads. I agree with Kalakoa about reforming and tightening the current tax structure before we look at increasing the GET. I'm sure that Tiffany Edwards Hunt is not the only person who may have improperly filed an owner occupant exemption, and equally sure that improper Ag exemptions are widespread. The list of possible loopholes and opportunities to cheat goes on and on.
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