New tax not the answer to road woes
Six members of our council and the mayor, who the people elected to look after them, have voted to add an additional one half of 1 percent to our excise tax, a regressive tax that mostly hurts those who can less likely afford to pay it.
As resident Alice Parker said at the Dec. 6 council meeting before this tax bill, 2670, was passed, she, as a senior citizen only living on her retirement, cannot afford to pay more for food, medications and services needed, which this tax will affect. And thousand of other “Alice Parkers” are on Kauai and saying the same thing — no more new taxes.
Only Council Chair Mel Rapozo had the will, the desire and the concerns of the people to say “no” to this bill. He listened to those testifying against this bill and along with his studying it, wisely voted no. His closing testimony on why he voted no was brilliant, and why none of his colleagues didn’t follow his lead and change even one of their votes is a mystery, a mystery that might come back to haunt any one of them who will be running for re-election.
The purpose of this bill is to raise $25 million to pave our 300 miles of county roads that badly need repair. But let’s look at some facts.
We are taking in about $17 million a year from our fuel, vehicle weight, utility and registration fees, and spending about $1.2 million of it on resurfacing our roads. So where is the bulk of it going? Since we are subsidizing our bus system $8 million a year we are transferring $3 million of it to that operation to make them look better. And in fairness, the people running the buses are doing the best job they can, but more efficiency needs to happen.
And obviously many other projects are using these road funds for other purposes than resurfacing. And this has to stop.
The point is that, historically, tax funds or budget funds have not gone to projects that they were allocated for, so why should we presume that this new excise tax will go solely to our roads?
The easy way out for those in power is to just raise taxes and not delve into the waste that they have created. But more tax is not “easy” for the citizens, so where are the people like Mel who want to protect them? And, Mel, the people will not forget your efforts in your run for mayor.
Glenn Mickens, Kapaa
Kudos to Congress for tax bill
Congress is working to finish a new tax bill that reduces the corporate income tax from 35 percent to 20 percent. It is important to note that corporation income is taxed twice — once when it is reported and a second time when it is distributed to the owners as dividends.
Adding up the current 35 percent, plus the current top dividend tax rate of 23.8 percent, plus state income taxes on both sides, equals a total income tax of around 60 percent on corporate earnings. This new bill will lower the total to around 45 percent.
The U.S. currently has one of the highest corporate income tax rates in the world. With a current total rate of 60 percent, it is no wonder that corporations have parked trillions of dollars of income overseas. This has enriched other nations at our expense.
When the government gets too greedy, it loses revenue. Now that the total tax is dropping from 60 percent to 45 percent, we should see tax revenues rise over time. Multi-national U.S. corporations will surely report more of their income as U.S. income. Jobs will be created. Our economy will grow. Stock prices will rise for most corporations, generating more taxes. All these factors will improve our debt ratio (national debt divided by GDP).
This bill also reduces many corporate tax loopholes and includes new taxes to prevent corporations from parking their earnings overseas. Notice that the stock prices of many corporations went down after the Senate passed the bill. The market understands that these companies will lose tax loopholes.
Regarding new individual tax rates, everyone will get a much higher standard deduction. Some individuals will pay more as many deductions and loopholes are reduced, but the average person in every tax bracket will get a significant tax reduction over the next 10 years.
Mark Beeksma, Koloa