A lot of people have expressed concern to me that today’s historic tax cut will be next year’s excuse to impose tax increases.
Or that letting Hawaii taxpayers save $5 billion through 2031 will result in some sort of a budget crisis for the state.
My take is that Hawaii absolutely can afford the state income tax cuts proposed by Gov. Josh Green and endorsed unanimously by the Legislature, both now and into the future, without having to raise any new taxes.
Keli’i Akina
Even with pressing problems such as the rebuilding of Lahaina, the state seems well situated to give Hawaii taxpayers a break, so if not now, then when?
Consider, for example, the fact that the Hawaii Council on Revenues projects the state will take in about $9.5 billion in tax revenue this year, and expects that to grow by 4.8% next year, then by between 3.5% and 4.5% each year after that for the rest of the decade. At that rate, Hawaii tax revenue will total about $12 billion in 2030.
Hawaii taxpayers, meanwhile, are expected to save about $1.2 billion that year, according to state tax officials, so the state still would still have almost $11 billion to cover state services and debt payments.
Yes, it’s important to recognize that these are just estimates. But let’s consider also that between 2010 and 2019, state tax collections increased each year by 6.36% on average.
Could state tax revenue slow to less than that? Sure. But we must also factor in that these tax cuts are likely to encourage economic growth and boost state tax revenues.
At the very least, they could help stem the tide of Hawaii residents seeking a lower cost of living on the mainland, which would mean more people in Hawaii to pay taxes.
On the spending side, there always seems to be wiggle room to slim down the budget, and, in fact, state leaders already are looking for ways to cut spending.
For example, at the signing ceremony for the tax cuts, Gov. Green noted that the state has about a 30% job-vacancy rate, so “we’re doing a deep dive into the costs that we have on the books that maybe shouldn’t be on the books.”
Just last year, Gov. Green cut approximately $1 billion from the Legislature’s proposed biennial budget.
And this year, when concerns about Lahaina funding were at their highest, some lawmakers suggested across-the-board budget cuts of up to 15% and reductions to grant-in-aid funding. Yet they wound up passing the sweeping tax cuts instead.
I believe our leaders made the right call, and that the state budget won’t suffer because of these long-overdue tax cuts. In fact, there is every reason to believe these cuts will make Hawaii more affordable and create more economic opportunities — especially if we stick to smart budgeting. __________
Keli‘i Akina is president and CEO of the Grassroot Institute of Hawaii.
In my position here at the Tax Foundation, I get to meet and speak with quite a few tax professionals. Like you and me, they’re human, they don’t know everything, and part of their job is finding out answers that they don’t know off the top of their heads.
When they have state tax questions, for example, it’s natural for them to call the Department of Taxation to see if somebody will answer those questions. The Department is a source of information, the information is right most of the time (sometimes through no fault of the Department, as explained below), and it’s free all the time.
I’ve seen a number of the questions asked, because sometimes the professionals will write them down in an email and send them in. And, in my experience, sometimes they fall into a trap. Here are some of the traps I’ve seen.
The question isn’t specific enough. If they asked the Department whether the sale of drugs is exempt from General Excise Tax, for example, their answer probably would be “no.” Most common drugs are not exempt. But if they’re prescription drugs sold to patients using them, an exemption does apply.
Many questions mix up the tax with a retailer’s charge to recoup the tax. “Why do I have to pay 4.712% tax if the tax law only allows for 4.5%?” you might ask. This is because the retailer has to pay the tax, not the customer, and if the retailer passes the tax on to the customer (most do) then the retailer has more income. A retailer charging a customer 4.5% tax on a $100 invoice for a total of $104.50, for example, will find that the tax due is 4.5% of the $104.50 that the customer paid, not only on the $100. The 4.712% rate corrects for this quirk.
The question suggests the answer the professional is worried about. This tempts the responder to follow it (it’s the answer most favorable to the responder’s employer, after all). For example, questions were sent in about the recently enacted passthrough entity credit, which allows a partnership or multi-member LLC, for example, to pay tax that otherwise would be paid directly by the owners. This is to avoid limitations on deducting the taxes on the owners’ federal returns. One questioner came to the Department asking whether the tax deduction would be limited anyway on the owner’s return because the partnership was an investment of the owner instead of a business where the owner put in substantial labor. The Department’s agent was apparently convinced by the “worst possible outcome” in the question and decided to run with that, agreeing that the deduction would be limited. Instead, the answer probably is that the partnership paid the tax, so it took the deduction; the owner will then pay tax on the net amount of income reported by the partnership, and the owner doesn’t need to worry about the deduction on the individual return.
The moral of the story is that when you go to ask the government agency a question, whether you are a tax practitioner or just an interested person, you really should do your homework previously, so you have a good idea of what the relevant facts are and what the answer should be. Of course, it’s quite possible that you will miss something and that the answer will be different. That person on the other end of the line deals with tax law every day and has probably responded to similar questions in the past. But you will have a much smaller chance of getting the wrong answer because you didn’t ask the right question.
Do you like to eat and drink hot foods? Well, here’s some hot news to help you avoid getting burned.
One common food safety method to prevent food poisoning is to heat the food to a temperature where bacteria are killed, and serving the food hot. We love hot food, and enjoy its aroma filling the air with mouthwatering appeal. Unfortunately, the hot food is also a food safety risk, since consuming food that is too hot is also a known cause of cancer.
It’s amazing that the temperature where people like to drink their coffee or tea is also the temperature which can cause esophageal cancer.
“In this systematic review, we collected the published literature on the association between consuming tea, coffee, maté, or other high-temperature beverages or foods and risk of EC (Esophageal Cancer). We analyzed the results for amount consumed and temperature of drinking separately. For tea and coffee, there was little evidence that the amount consumed was associated with EC risk, but the majority of the publications reported statistically significant increased risks associated with higher temperature of use. For maté, individual studies and the combined analyses showed increased risk of EC associated with both amount consumed and with temperature of drinking, and these two seemed to be independent risk factors. For other hot foods and drinks, the majority of studies showed higher risk of EC associated with higher temperature of use.”
“Although the mechanistic and other relevant evidence for very hot beverages is scant, biological plausibility exists for an association between very hot beverages and cell injury and the 10 sequelae that might lead to cancer. On the basis of these considerations and on the totality of the evidence, drinking very hot beverages at above 65°C was classified as “probably carcinogenic to humans” (Group 2A).”
As a reminder, 65º C is equal to 149º F. Food and drinks at this temperature and above are hot enough to cause burns in the esophagus, which can lead to cancer. However, the temperature which food should be served is very close to this. In fact, Chef Resource website has an article, What temp should hot food be served?, which explains,
“It is a common concern among hosts and chefs alike: What temperature should hot food be served at to ensure both safety and enjoyment? Properly serving hot food is essential, as it not only guarantees that it is safe to consume but also optimizes its flavor and texture. To answer the question directly, **hot food should be served at a minimum temperature of 140°F (60°C)**. This temperature ensures that any harmful bacteria are killed or rendered inert, reducing the risk of foodborne illnesses.”
Of course, some foods come to the table hotter than that. Pizza comes to the table near 90º C, or 194º F, which can damage gums and teeth. We all know how it feels in the gums behind your front teeth after eating a hot, melting cheese pizza.
“Since 2016, the cancer risk in connection to hot beverage consumption has received increased scrutiny from science and consumers alike. The reason for this has been the classification of “very hot beverage consumption” by the International Agency for Research on Cancer (IARC) into group 2A as “probably carcinogenic to humans”. Specifically, the risk of developing oesophageal carcinoma increases with the consumption of very hot beverages as shown by a number of epidemiological studies. Beverages above 65 ◦C are considered “very hot”. The International Agency for Research on Cancer (IARC) evaluates “very hot (>65ºC) beverages” as probably carcinogenic to humans. However, there is a lack of research regarding what temperatures consumers actually perceive as “very hot” or as “too hot”. A method for sensory analysis of such threshold temperatures was developed. The participants were asked to mix a very hot coffee step by step into a cooler coffee. Because of that, the coffee to be tasted was incrementally increased in temperature during the test. The participants took a sip at every addition, until they perceive the beverage as too hot for consumption. The protocol was evaluated in the form of a pilot study using 87 participants. Interestingly, the average pain threshold of the test group (67ºC) and the preferred drinking temperature (63º C) iterated around the IARC threshold for carcinogenicity.”
“According to the National Coffee Association of the USA, which informs many large companies in the food and beverage industry, coffee should be served at around 180–185°F, not much lower than the standard brew temperature. However, many coffee experts believe this is too high of a temperature.
They suggest serving coffee somewhere within the range of 155–175°F, leaning more toward the lower end of the scale with higher quality coffee beans. The assumption that lower temperatures are better for specialty coffee fits well with what we already know – that you can use temperature to reveal or mask coffee flavor.
While there is no answer everyone agrees on, there are some useful guidelines to help you find that perfect temperature for your cup of coffee or espresso:
If you prefer the rounded, sweet, and bitter notes of coffee, stick within the 155–175°F range.
If you enjoy a brighter, sharper, and more acidic cup, aim for the 120–140°F range.
If you care more about the warming sensation of hot coffee than you do the flavor, a cup within the range of 180-185°F would be best for you.”
Note that they are recommending temperatures well above the dangerous cancer-causing limit of 65º C, or 149º F.
What’s a food-lover to do? Must you give up your scalding cup of coffee or hot chocolate on those cold nights? Or is there a way to have your hot cake and eat it, too?
Here are some suggestions:
Let hot foods cool for about 5 minutes before consuming.
If the food or drink is too hot, spit them out. Don’t swallow.
Take smaller sips of hot drinks.
Even if you don’t want to eat food too hot, make sure you heat, or reheat, the food or drink to over 160º F to kill bacteria. Then let the food sit a few minutes before consuming.
Remember that your mouth, teeth, and gums get burned first, and worse than the esophagus, since the food is hottest there. It also burns the tongue and taste buds, reducing the pleasure and perception of flavor.
People can withstand heat more in the mouth than in the hands. However, for safety, if it’s too hot to handle, then it’s too hot for your mouth, too.
Hot foods essentially cook your mouth and throat. This harms oral bacteria, too.
Keep in mind that daily habits, like consuming cups of hot coffee or tea, have cumulative impacts. Over time, the daily assault to your mouth, throat, esophagus, and stomach with hot foods will take a toll.
We have only really focused on Esophageal Cancer. It is likely that hot foods will also contribute to mouth, throat, and stomach cancers.
Remember that heat is a carcinogen. Consume it with caution.
Cooking food is a culturally defined activity, and our bodies were not designed to consume high temperature foods. But with a little patience, and willingness to eat and drink foods a bit less steamy, you can enjoy the benefits of a tasty, hot meal without getting burned in the process.
Most of you have heard by now of the massive tax cuts just signed into law by Governor Green.
At the press conference held at the signing ceremony, some very good journalists asked him: “With such massive cuts, are you going to be able to maintain public employee salaries and social services?“
“Yes,” he said. He said that there is now, government-wide, about a 30% vacancy rate in the number of authorized positions. He said that the departments are going to do a “deep dive” into why these positions are vacant. If they’ve been vacant for four years in a row, for example, it would be presumed that the department really doesn’t need those positions. If they did, they’d need to tell the Governor why; if it turns out that a particular position is needed but can’t be filled because the private sector pays a lot better, for example, then they would consider paying more money for that position to be competitive for the talent the department needs.
Adding to the problem, although perhaps not discussed at the press conference, is a very arcane budgeting practice that we wrote about in 2017. Apparently, departments are not allowed to budget for things like vacation pay and paid sick time, although such expenses are incurred whenever you have a work force. Instead, the departments are supposed to pay for such things out of the money that is allocated for the positions that are vacant.
We, for one, can’t see any good reason why vacancies have to be used in this manner. At the very least, it seems deceptive to taxpayers, labor unions representing the employees, and others interested in the budgeting.
Anyway, back to the deep dive the Governor spoke of. Looking at the budget in that way seems a little backwards. In the best of all worlds, the departments do their deep dives first and come up with a number by which their budget can be cut. Then you add all of the numbers from the departments, and you know how much you can cut taxes.
But this is not the best of all worlds. Human nature being what it is, if the so-called deep dive was done first, no sane department head would voluntarily offer up their department to the chopping block. Instead, we would expect the department heads either to say that they really need everything they now have. Or, if they are a bit more devious, they would offer up a ton of rank-and-file positions (as opposed to civil service exempt positions in management), which would cause the government union leaders to go ballistic and, maybe, force the department to keep the positions.
So, instead of doing this charade, we do the big tax cut first. Then the department heads have to scramble to justify their piece of the much lower pie. Is it an exercise in cruelty? We don’t think it has to be. If anything, the resulting chaos will lead to departments being much more transparent about what they are spending and why. For the bigger departments, such as Education, Health, and Human Services for example, the process may cause a lot of pain. But that pain results from the opacity of the budget as it exists today. We’ve written before about the Department of Education.
Governor, we wish you the best of luck on this project to right-size our government. Somebody has to do it. We now hope that you can get it done.
Some people might have been surprised to see staffers from the Grassroot Institute of Hawaii in attendance at Gov. Josh Green’s recent bill-signing ceremonies for historic tax cuts and housing reform.
But they shouldn’t have been. These events — and Grassroot’s presence at them — were proof of something I’ve been telling people for a long time: that Hawaii might be a one-party state, but that doesn’t mean it’s a one-idea state.
In truth, Hawaii has a lot of room for new ideas and new ways of thinking, including ideas promoted by the Grassroot Institute of Hawaii.
Keli’i Akina
The exciting outcomes of the 2024 state legislative session showed that we have support for our ideas, and we can we can successfully advocate our values for the betterment of all Hawaii residents
Indeed, this is what’s behind the Grassroot Institute’s motto “E hana kakou” or “Let’s work together.” We really can work together for a better Hawaii. We just need to identify the goals we all can agree on, produce thorough research to inform our legislators, and bring together different individuals and groups necessary to help achieve those goals.
As Gov. Green was signing into law his huge state income-tax cut and a GET exemption for certain medical payments to doctors, he acknowledged how representatives of many different political and economic perspectives came together and worked so hard to bring us to that moment.
As I stood there, I couldn’t help but reflect on how Grassroot has expanded its reach and impact to become the most influential local voice advocating policies that advance individual liberty, economic freedom and limited, accountable government.
Actively participating in the marketplace of ideas has helped us refine our reputation as an organization rooted in philosophical and intellectual integrity, which I believe has earned us a seat at the table in working toward a more free and prosperous Hawaii.
Looking ahead, I welcome more opportunities to advance policy options that will lead us to a more free and prosperous Hawaii. __________
Keli‘i Akina is president and CEO of the Grassroot Institute of Hawaii.
With a few strokes of the pen, Governor Green turned Senate Bill 1035 into Act 47 of the 2024 Legislature. It marks an end in a multi-year journey for the many health care providers in the Hawaii Provider Shortage Crisis Task Force who were trying to find some way out of the General Excise Tax which, they said, was bludgeoning physician practices to death here in Hawaii. The Act gives them a significant exemption, for payments from Medicare, Medicaid, and TRICARE, beginning on January 1, 2026.
Here is some of the back story of this bill that few people have heard about.
One of the things we at the Tax Foundation of Hawaii do, but don’t publicize very well, is that we help people who want some kind of tax change. We educate them about the legislative process. If they have concrete ideas for tax change, we’re happy to draft a bill to accomplish that change. We worked with Dr. Scott Grosskreutz of the Task Force to draft the bill that eventually became SB 1035.
Just because we draft a bill, however, doesn’t mean we at the Tax Foundation of Hawaii support it. We draft bills because we prefer to have legislators debate a bill on its merits, as opposed to getting distracted with technical issues that often come up when a bill is drafted by someone with too little legislative experience or too little experience with tax bills. The Foundation submits “comments,” neither supporting nor opposing testimony, on every bill that we follow, including on those that we draft.
We told the Task Force this, just as we tell everybody else that we help.
When SB 1035 was heard in the Senate Committee on Health and Human Services, its first committee, in February 2023, Senator Joy San Buenaventura from Puna, who chairs the committee, asked us which, of the half dozen bills before the committee that sought to provide GET relief to doctors, would be most likely to clear Ways & Means. I pointed to SB 1035 and the Senator had her committee pass it out (although the Senator before the hearing appeared to like another bill, SB 761). To me, some of the other bills had technical issues and some were quite a bit broader, meaning greater revenue loss and a bigger headache for the money committees.
The bill did indeed go to Ways & Means and Consumer Protection, passed out, and crossed over to the House. The House Health & Homelessness and Economic Development Committees passed it, but the bill then stalled in House Finance.
This year, another bill that would have granted a GET exemption to primary care practices (HB 1675) was moving through the system, but we had concerns that no one was coming up with an adequate definition of primary care. The bill foundered and things were looking bleak. Somehow, however, House Finance was persuaded to resurrect SB 1035. It then went to Conference Committee, and it came up with a version that both houses then passed.
SB 1035 was the best choice at the moment, and as it moved further along in the process, more and more support coalesced around it, leading to the bill actually crossing the finish line. I, for one, am glad to see that it has become law. Hopefully, it will help to cure us from the health care crisis that our state has fallen into.
There is a plethora of portable Bluetooth speakers on the market in all price categories. So why do you need or want Soundcore Motion X600? After all your mobile devices, your TV, your internet radio, etc. all have speakers.
So what is the point?
Let’s look at one application and go from there.
I can’t speak for others, but the demographic of many households in Hawaii includes older folks with shall we say, diminished hearing capacity. In our case, blasting the TV because one of our household members or guests has trouble hearing what the guy on PBS Newshour is saying was a regular occurance at the home. The volume was not appreciated by neighbors.
This was mitigated by using a portable speaker which was placed strategically so that our beloved household member (who shall go unnamed) could hear the program without informing the entire neighborhood.
Of course, there are other applications for a portable speaker than attending to hard-of-hearing kupuna.
At the back of the box you plug in the USB cable. There’s an auxiliary port for an additional audio device. (Rob Kay photo)
I listen to a lot of podcasts. If I want to listen to one of my favorites (Hidden Brain) in any room of the house, a portable speaker is a no brainer. What’s more, the quality of the sound is so much better than cranking up the volume on my tablet, laptop or phone.
Why the Soundcore Motion X600?
Before I even acquired this item I started experimenting with a (less expensive) portable speaker. However, it wouldn’t pair with my LG TV.
Go figure?
Another choice would have been to spend a few hundred dollars on a “sound bar”, a device designed specifically as a high fidelity add on for the TV. I wanted something that would work with any device.
I would tell the nice lady that the handle is quite sturdy on the Motion X600 so she can take it anywhere. (Courtesy Soundcore)
My first choice was to go to Soundcore, which is manufactured by Anker. I was familiar with their earbuds and their chargers, which are well-engineered and competitively priced. I was intrigued by the Sounccore X600, which had good reviews on Amazon and elsewhere. It’s priced at $200 which is very reasonable if you get decent sound.
So let’s take a step back.
Do I need high fidelity to listen to PBS News Hour? No. But if PBS is airing a “Great Performance” segment with Audra McDonald (which I watched the other day) good audio was obligatory. I’m also an internet radio freak and it’s hard to enjoy music without a quality speaker. (When I stream my favorite French Jazz station TSF, I want to do justice to Ella Fitzgerald or Satchmo when he hits a high C).
The X600 will do the job. It’s a sleek, solid piece of gear with a cool, art deco look. Available in Aurora Green, Lunar Blue, or Polar Gray (which I have) it measures 6.5 by 12.1 by 3.2 inches and weighs a hefty 4.0 pounds. (A brick weighs 5 pounds).
The other thing I like: Its waterproof. You can take it outside on the lanai and if it starts raining you won’t have to freak out. It has an IPX7 waterproof rating meaning you can submerge the speaker to depths of up to one meter for 30 minutes. You could theoretically bring it into the shower, but I don’t think that would be a good idea.
The X600 has “Spatial Audio”, an “upward firing driver” that points to the heavans. Seriously, the audio quality on this device is excellent. (Courtesy Soundcore)
If you’re listening to a podcast or streaming NPR, its 50W speaker will be more than enough. For music it’s got a feature called “sound immersion” which makes you feel like you’re in a home theater. (More on that later).
In essence X600 will deliver high fidelity sound quality while allowing you the portability move the speaker anywhere.
Think of it as a Bluetooth boombox. It resembles a boom box with a sturdy handle. It’s kind of cool to carry it around the house while your favorite bules artist is blasting away.
In a way, it’s overkill if you’re just listening to TV news but as I mentioned earlier, a less expensive Bluetooth speaker may not even work with a TV.
Set it up and Use It
It’s easy enough to set up.
Just remove from the box and plug it in. All you need is USB C cable to keep it charged and you’re in business. (FYI Anker, it would be nice if there were a wall charger as well as the USB port). There’s also a 3.5mm auxiliary input so you can connect another audio device. The battery will last 12 hours. That’s more than enough time to watch a Netflix movie with the X600 tethered via Bluetooth to your laptop.
I got it working on just about every device at home. I say “just about” because I had trouble pairing it with my fancy internet radio (Como) but realized that they need a proprietary Bluetooth speaker.
Our friend likes to use her Motion X600 in the kitchen (Courtesy Soundcore)
Everything else, TV, the laptop, Pixel 6, etc. worked fine. It did take a bit of tweaking in some instances to get it paired but that’s to be expected. I did get it working with the PC as well but only after I purchased a new Bluetooth 5.0 “dongle” (from TP-Link). Once I added it and downloaded the new driver it paired.
Just a tech observation: Occasionally you may need an “updated dongle” to handle new devices. Despite digital standards, it’s the wild west out here sometimes. Not everything operates “harmoniously”.
The controls on top are LED-backlit buttons. They include power, Bluetooth, Spatial Sound, Bass Up (which enhances low-end response), play/pause, and volume up/down buttons.
Other than the basic controls on the device, there’s a Soundcore app (for Android and iOS) which displays battery life and a power button for the X600. There’s also a playback button and a volume slider. There’s also an Equalizer which lets you tweak the Bass or employ multiple presets: Balanced, Soundcore Signature (the default), Treble Boost, Voice, and Xtra Bass. You can use the app to fine tune the speaker to your liking. I pretty much left everything preset.
I listened to a bunch of different music genres—jazz, country, pop and R&B to see what I could wring out of that speaker. (No rap). The X600 seemed to like everything. Was listening to Albert King and Stevie Ray Vaughan on HPR and hit the “spatial sound” button on the controls. It was magic. I felt almost as if I was back at Filmore West. (Yes, I’m a boomer).
Its become a regular item in my kitchen too! (Rob Kay photo)
So let’s talk practicalities. If you’re going to use a portable Bluetooth speaker, be aware that it’s easier to operate with some devices than others. For example, if I’m listening to a NY Times podcast on my laptop all I do is turn the X600’s power on and (usually) it will grab the audio.
With my cell phone, same thing. if I’m listening to Jimmy Kimmel’s latest spiel on YouTube I just power up the X600 and it will find the device it’s supposed to connect to.
Sometimes another step or two is involved (like rebooting) but it’s not a big deal.
Using it for the TV is slightly more involved. Obviously, you flip on your TV and the internal speaker kicks in. So, you have to hit the “Settings” button on the remote then go to the “Sound Out” setting, click on the “Device List” and then click again to check off the button that says “Soundcore X600”. (Of course you’ll have to be paired from the get-go).
The upshot: If you’re a consumer of digital music and conversation, for $200 the Motion X600 is a sweet deal and a good investment.
Soundcore X600 Technical Specifications
Dimensions: 12.0 cm in height, 30.0 cm in width, and 8.1 cm
Weight: 1980.0 g (about 4 pounds)
Power source: Battery and USB
Battery capacity: 6,400mAh / 7.2V
Audio output power: 50W
Charging time: 6 hours with a certified 5V/3A wall charger
Playtime: Up to 12 hours at 50
Waterproof level: IPX7
Bluetooth version: 5.3
Wireless protocols: Bluetooth (with LDAC support)
Wired connectivity: 3.5mm audio jack
Speakers: 5 audio drivers and 5 amplifiers
Premium design with partial metal exterior
Supports Sony’s LDAC audio
Spatial audio mode widens soundstage
BassUp feature boosts the bass
9-band graphic EQ and several sound presets
Rob Kay is a technology columnist for the Honolulu Star Advertiser and the creator of FijiGuide.com.
One pair of bills being pushed very heavily in this past legislative session was House Bill 2686/Senate Bill 3234, relating to the stabilization of property insurance. The bill was introduced because it appears that the property insurance carriers are starting to look at Hawaii as a high-risk place, like Florida and California. Premiums are rising at astronomical rates, assuming that insurance is available at all.
Neither bill made it through to the end of the legislative process, but our governor has said that the issue is important enough so that he is creating a Climate Advisory Team to study the issue and bring recommendations to next year‘s legislature. One of the first projects the Governor is giving the Team is to “recommend steps to create a durable fund to mitigate the impacts of dynamic climate change and to develop a fair and comprehensive structure to resolve claims related to future disasters. This is necessary to stabilize the insurance market and defray the financial burdens arising from the increased impacts of climate change.”
Those bills would have created a fund that would cover some of the risks incident to writing certain kinds of property insurance. To fund it, the bills would have jacked up transient accommodations taxes on transient vacation rentals, conveyance taxes, and perhaps other taxes, by undetermined amounts. Presumably, the recommendation from the Climate Advisory Team will be along similar lines.
Let’s think for a moment about what was really being proposed here.
Insurance is a means to spread out the risk of large costs, such as the damage from a hurricane or tsunami, over a large pool of people so each person pays only a little bit and the money collected is available to cover some of the costs if the catastrophe insured against actually comes to pass. Because insurers typically buy reinsurance, the pool of people over which the risk is spread is often global and not just simply from within the State.
Taxation is a means to spread out the cost of government among all the citizens who are subject to that government. One of the things government can and does do is set money aside for catastrophes or emergencies. To that extent, it behaves the same way as insurance, but it distributes the cost over a different set of people. That set can vary depending on what kind of tax is used, but usually consists of mostly residents (with some, perhaps, being exported to tourists).
When government uses its taxing power to create a fund making insurance more affordable, that power perhaps can be justified if the thing that’s being insured against is something everybody’s in danger of. Creating a hurricane relief fund, as was done years ago after Hurricane Iniki, is justifiable for that reason.
The bills, however, also proposed to set up a fund to pay for volcanic damage if houses are built in certain zones that are relatively close to the volcano. If someone builds in one of those zones, Madame Pele speaks, and hot lava rolls over the house, then the fund helps pay for the loss.
That one is a little tougher to understand and support. A property owner decides to build a house close to a volcano, is warned of the risk, but builds anyway because the property is cheaper there. If that is their decision, then why do the rest of us taxpayers, who live nowhere near the volcano, have to be on the hook for lava damage?
Finally, many of the complaints of astronomically high insurance rates come from condo owners where the risk can be traced to no or inadequate maintenance done in prior years. The bills don’t propose to foist that kind of risk upon taxpayers, which seems to be the right decision.
We hope that the Team’s recommendations, and further legislative proposals to stabilize property insurance, would limit taxation proposals to those shoring up the kind of risks that we all bear.
Hawaii residents have long been asking lawmakers to help lower the state’s high cost of living.
This year, Gov. Josh Green and the Legislature showed they were listening by passing the biggest income tax cut in state history and literally reducing the cost of living for every Hawaii resident.
In the face of such a monumental reform, it seems incomprehensible that anyone would criticize a tax cut that puts money back in the pockets of working families. But that’s exactly what is happening.
Keli’i Akina
Not only that, critics of the governor’s tax plan are playing some funny games with the numbers, making me wonder if they are intentionally trying to mislead people about what’s really going on.
For example, the Institute on Taxation and Economic Policy, based in Washington, D.C., claims that 42% of the benefits from the new tax cut will accrue to the top 20% of earners.
The group, which believes that the fairest tax system is one in which the tax rates increase along with income, also says that the bottom 20% of Hawaii earners who make less than $27,200, will get only a $335 tax cut.
That is all true, but stated in a misleading way.
The more meaningful way to look at it is that a family making the median income of $91,100 is going to save more than $1,500 this year, and by 2031, their taxes will decrease by 69%.
And because Hawaii has 12 income tax brackets — the most in the country — that increase as one’s income increases, everyone below the median will save larger percentages and everyone above it will save lower percentages.
Meanwhile, Hawaii’s standard income-tax deduction will be increasing from $4,000 to $24,000 by 2031, so the person making $27,000 a year isn’t going to have much of an income-tax payment at all.
In fact, Hawaii residents in the lowest tier of earners will be going from the second-highest state income-tax burden in the nation to the lowest out of the 42 jurisdictions — 41 states and the District of Columbia — that impose income taxes, while average working families will see their state income tax burden dropping from second highest to the third lowest.
Critics of the governor’s tax cut are also worrying that Hawaii cannot afford it.
However, I say we cannot afford to not cut taxes.
For years, Hawaii’s governments have been stuck in a spiral of high spending and high taxes — the result being a stagnant economy and a state we can’t afford to live in.
Hawaii’s high cost of living is being driven even higher by inflation, and people are leaving the state for better opportunities as many of Hawaii’s beloved local businesses are closing their doors.
The governor’s tax cut is not fiscally irresponsible — it is a meaningful reform that will lower the cost of living for local families and encourage economic growth.
Please don’t be fooled by shell games about who pays how much tax. This historic tax cut is exactly what we have been asking for — a reform that will make a big difference to ordinary working families.
And the governor and our legislators — who supported the state income-tax cut unanimously — deserve credit for finally pushing through such a groundbreaking measure.
My hope is that this is the beginning of a new era for Hawaii. __________
Keli‘i Akina is president and CEO of the Grassroot Institute of Hawaii.
Join Chamber of Sustainable Commerce for a Lunch and Learn
Logo of the Chamber of Sustainable Commerce
Thursday, June 6, 2024 at 12-1 PM via Zoom
I’m partnering with the Chamber of Sustainable Commerce to show how businesses can become powerful forces for good. Invite everyone interested to attend this event. We will provide valuable insights into sustainable business behaviors that can benefit both your business and the community.
Are you interested in Business as a force for positive change?
Are you a Business owner with a deep interest in maximizing your sustainability impact?
Have you ever wanted to understand what Sustainability, Business and Leadership have in common?
Why not join us at the Chamber of Sustainable Commerce lunch-n-learn event?
Sign up today and discover how you can contribute to a more sustainable future.
Don’t miss this opportunity to learn from your fellow practitioners and SMEs. Meet new people.
Use QR code to register
Praise:
“Rob Kinslow, a dedicated advocate for sustainable development in Hawaii has many years of experience tackling energy and sustainability challenges in our state. His commitment and passion for creating sustainable solutions are truly inspiring. For years, he has been educating, mentoring, creating sustainable business projects and inspiring within the for-profit, faith and not-for-profit business sectors in Hawaii.” — Dingilizwe Ncube, BOC, PEM
“I recommend Rob wholeheartedly as a speaker for your organization, if sustainability is of concern. He is one of the best speakers we have had in more than 13 years of regular Wednesday evening speakers.” — Dr. John Webster, Director, Ret., Hogan Entrepreneurial Program in Hawaii
“Rob Kinslow has a skillful eagerness to express his belief in sustainability, as a strategy for human progress.” — Dr. Elizabeth S. Raman, founder ReBuild Hawaii
“Rob takes complex concepts and makes them understandable and fascinating. I highly recommend Rob for any organization that wants to go beyond sustainability – to rejuvenation and revitalization.” — Anabel Chotzen, Professional Speaker, Corporate Trainer, Business Coach
