BY MICHELE VAN HESSEN – Following a fiery debate in yesterday’s joint budget briefing, the House Republican caucus reiterated their opposition to Governor Abercrombie’s contentious pension tax proposal.
“We, the House Republican caucus, have drawn a line in the sand on this issue. If the numbers, Governor Abercrombie has presented are correct, he balancing his budget on the backs of our kupuna, and we are committed to standing with the public to make sure this doesn’t happen,” said Rep. Gene Ward, House Republican Leader.
According to Abercrombie’s proposal, the pension tax is expected to raise $112.3 million in revenues per fiscal year. At the yesterday’s briefing, Ward asked Abercrombie how many citizens will be taxed by this measure. Abercrombie said the tax would hit 43,520 pensioners. The math says $112.3 million spread amongst 43,520 senior citizens amounts to $2,580.42 per person. Of course, the actual payment per person will be more or less depending on income.
“It is unfair to our retired kupuna who depend on a fixed monthly income. We cannot change the rules when it is too late for these folks to adjust their financial planning,” said Rep. Gil Riviere, a Republican freshman member of the House Finance Committee.
The argument was put forth that this tax will only impact those with high pension incomes. However, Rep. Barbara Marumoto, Minority Policy Leader, took issue with that claim at yesterday’s briefing with Abercrombie.
“I find that the level at which you start taxing pensions is extremely low, $37,500 for an individual,” Marumoto said. “When you start taxing pensions at such a low level, it’s almost cruel.”
While Marumoto’s comment drew animosity from the Governor who claimed she was incorrect, reports later cited confirmation from the Director of Budget and finance that the tax will affect those with an adjusted gross income above $37,500.
“The Governor says everyone has to paddle the canoe. These people have paddled, and we believe that they have earned the right to take a break. Our caucus is prepared to fight for that right and to stand up for our senior population, who have contributed their whole lives to the betterment of our state,” said Ward.
The House Republican Caucus is Minority Leader Gene Ward, Minority Floor Leader Kymberly Marcos Pine, Minority Policy Leader Barbara C. Marumoto, Assistant Minority Leader Cynthia Thielen, Assistant Floor Leader Corinne W.L. Ching and Minority Whips, Representatives George Fontaine, Aaron Ling Johanson, and Gil Riviere. For further information on the House Republican Caucus, please click here.
What Neal doesn’t seem to understand or care about is that if he taxes pension income some pensioners will leave Hawaii, others will not consider HI as a retirement venue. So what one might ask. The problem for Hawaii is that instituting such a tax will drive away many retirees who would otherwise contribute to Hawaii. Their Medicare and Social Security incomes will be lost. Their businesses will be lost. Income tax (and GET) proceeds from their “retirement” jobs or small businesses will be lost. Volunteers will be lost.
Retirees cost the state little; they don’t have kids to educate, don’t require much policing & the like. Chase retirees away and Hawaii will have a population that depends ever-more on the state. Could this be what Neal really wants? I hate to be so cynical, but chasing away retirees who refuse to be raped will make it easier for Neal and his ilk to rape those who remain.
Finally, numerous studies have made it clear that the best thing Neal can do is to cut government expenditures. Once cost have been cut to the bone (and it’s hard to imagine Neal doing this) increasing consumption taxes has the least negative effect on productivity. And in that case, Increasing the G.E.T. is the best thing to do. Or would Neal rather have a state full of sheep? May be.
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