The Legislature’s Big Money Grab

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Wednesday - April 08, 2009

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The dire economic news of today will not be reversed if our state Legislature has its way. There is a spate of tax and fee hike proposals still alive at The Big Square Building with one objective: to make you give more of your money to them.

We are facing an astounding $2 billion deficit in our state budget. There are only about 1 million people in Hawaii. Unless there is a dramatic cut in state services and/or personnel, or an unprecedented reduction of overall expenditures, we will see the greatest money grab ever effected by our government in history, and every man, woman and child will be affected.

Those of us on Oahu are still reeling from the General Excise Tax surcharge implemented to help pay for the rail transit system. There’s been more than a quarter billion dollars taken out of our local economy since its inception. Yes, there are relatively few who are financially benefitting from this project, but the vast majority of people will not. Ironically, these are the same people (along with tourists) who are bankrolling this venture. If there is an additional increase in the GET, you bet these folks will be the ones who will feel pain.

The proposal to increase the General Sales Tax is found in SB 1346. Although the bill is in the House, there is no percentage of increase documented. It could be .5 percent, 1 percent, 3 percent or 5 percent. Pick one. The city levied a .5 percent increase the last time. The state could easily double or triple that rate.

Possible? Well, anything is possible and, in tough times, it would be nice to add millions to the coffers with one fell swoop.

Yes, from an accounting standpoint, it would seem easy to increase the GET. All you have to do is pass the bill and vote to override an anticipated veto, then it’s a done deal.

As a matter of fact, there are several bills seeking out your wallet. SB 199 would sunset or repeal all tax credits. HB 1747 calls for an increase in the income tax rate for those earning $100,000 per year, and SB 1678 would tax out of state Internet and mail-order purchases. I suppose, from a bean counter’s perspective, it makes sense. But we are not statistics or columns on a balance sheet. We are people. And sometimes bureaucrats forget that.

The sheer amount of money being discussed at the federal, state and local levels is staggering. Whether it’s millions, billions or trillions, our eyes just glaze over and we tend to lose perspective on just how much this all really is.

For instance, it takes two people counting (by ones) 39 days to reach 1 million. One billion is a number followed by nine zeros. And a trillion? Think of how small a grain of salt is. A trillion grains of salt would fill an average-size classroom, top to bottom. Imagine if each grain of salt was a dollar bill. You get the picture.

We’re approximately two thirds of the way through this legislative session, and now is the time to voice your strong opinion regarding taxes and fees. If you are pleased with the direction our state is taking, by all means let your representative know. But if you subscribe to John F. Kennedy and Ronald Reagan’s belief that cutting taxes in a down economy is the best solution, then you must inform your representative.

Hopefully, we won’t get to the point where the Legislature will actually pass a tax increase when bankruptcies and business failures are so high. But, if they do, now is a good time to support Gov. Lingle and her efforts to not raise taxes. It may be the power of her veto pen that will ultimately save the day.