• Latest excise tax proposal a red herring? Latest excise tax proposal a red herring? A surprise announcement of a State Senate proposal that would jack the state’s excise tax 25, or to 5 percent of the cost of goods
• Latest excise tax proposal a red herring?
Latest excise tax proposal a red herring?
A surprise announcement of a State Senate proposal that would jack the state’s excise tax 25, or to 5 percent of the cost of goods and services, comes just days after another proposal that would have raised Kaua‘i County’s excise tax level 12, or to 4.5 percent of the price of services and products.
Across the board Kaua‘i’s county and state elected officials are opposing the boost to 5 percent, while some are longing for the days when the tax would only be raised to 4.5 percent.
Beware of a possible “compromise” soon at the State Capitol, where we will be blessed with only an excise tax rise to 4.5 percent, instead of the unpopular 5 percent.
This potential “red herring” or any boost in our excise tax are unwanted gifts for Kaua‘i County.
The rise in excise tax makes sense in Honolulu where departed Mayor Jeremy Harris’ dream of a fixed rail mass transit system lives on. But a boost of Neighbhor Island counties’ excise tax rate would pay for other “mass transit” programs that Kaua‘i mostly really doesn’t need at this point. It will also dump millions in the state’s general fund that can be used for just about anything the Legislature comes up with. It would also allow the state tax department to boost the standard deduction on state tax returns. This standard deducation is way below the federal standard deduction, as well as much lower than that found on returns from most states on the Mainland that have a state income tax.
The gain on state tax returns and the supposed benefits from new “mass transit” programs – which likely doesn’t include improvements to state highways – would be just a fraction of the cash value of new excise taxes Kaua‘i residents would be paying with a boost to 4.5 or 5 percent.
This ploy for new state tax funds comes just days after government union employees were given a healthy raise that is sucking up the bulk of the extra taxes being generated by our booming economy. The state employees have seen slim raises in the 1990s, which the raise is helping to make up.
Apparently, the excess taxes collected beyond the transit programs would go to pay for some of the pressing needs of the state that have now fell by the wayside.
The bottom line to all this is that any new excise tax boost will be costing us hundreds of dollars per household each year. Are you in favor of that? If not, it’s time to lobby against any new boost to our already high state taxes.
