Friday, May 27, 2022 |
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With property taxes, the devil is in the details
Following from earlier letters and now the announcement in The Garden Island of new and pending changes to our property taxes, beware! The devil is in the details.
As I previously wrote, citizens of Kaua‘i must wake up, pay attention and get engaged or we may find ourselves with a modified Real Property Tax system that looks good for the moment and turns out to be a nightmare in disguise.
From the article, it seems, for a moment, that the council and administration were working together on changes to benefit more homeowners on Kaua‘i. As I read further and studied the Real Property Division’s claim form, I discovered something quite different.
We read that there is a revised exemption for residents earning less than $56,400 and that the added bonus is an additional $80,000 exemption on your tax assessment calculation, which is being further considered to be raised to $120,000. By comparison, previous years’ income exemption required residents to earn less than $40,000 to receive an additional $55,000 exemption. I studied things further and called division for clarification and this is what I found out:
First, the form has been revised and looks almost identical to the prior year’s version. The previous federal or state adjusted gross income (AGI) required on the claim form has been changed not only in amount, to $56,400, but in the actual basis of total income.
For your reference, AGI is a very common base-income method for determining many things, such as when looking to qualify for a loan. The definition from Wikipedia states that adjusted gross income is total gross income minus specific items laid out in the tax code. For most individual tax purposes, AGI is more relevant than gross income.
On the new form, the requirement is now less than or equal to $56,400 in total income. When I called the division and asked for guidance, they instructed me to use the total income from line 22 of the federal return.
When I asked about the Hawai‘i return, as there is no such equivalent, the employee tried to explain how I should calculate my total Hawai‘i income. They went on to describe the kinds of income that I should add together to reach the amount needed.
When I said that I was not a tax accountant and was confused, not wanting to complete the claim form incorrectly and perhaps having it rejected, they told me to bring in the form with the returns and they would figure it out.
The next requirement, which deals with providing proof of income, the county previously asked the claimant to provide page one of their U.S. Individual Income Tax Return as well as pages one and two of their State of Hawaii Individual Tax Return.
Now the county is requiring a full copy of your Tax Returns (Federal and State). I was stunned, so I called to make sure this is the case. Yes, the county is now asking that all claimants provide complete returns.
They suggested that I walk everything in to them and have them copy all of the returns and figure out the income for the form. I asked what the county was going to do with all of this documentation — approximately an inch thick of paper for multiple owners’ returns versus the six pages in prior years — and I was told they would analyze it and keep it in their locked files.
Wow. In the name of making things fair and balanced and to help owners with financial need, we have a new burden to not only complete a form for which the department can not provide simple instructions, but to provide new reams of tax documents for them to analyze and store.
It seems that by changing the basis of determination — from the common AGI to total income — the county has figured how to raise the burden and perhaps keep more people from actually qualifying, all wrapped in the disguise of increasing the income limits.
The expense of government continues to rise and we all wonder where our tax dollars are going. So the point bares repeating: Citizens of Kaua‘i must wake up, pay attention and get engaged or we may find ourselves with a modified RPT system that looks good for the moment and turns out to be a nightmare in disguise.
Jeff Demma, Wailua Homestead
Let nature decide
English Philosopher Herbert Spencer (1820-1903) said, “The ultimate result of shielding men from the effects of folly is to fill the world with fools.”
All the drivel about people jumping off at Queens Bath raises my blood pressure. Kipu has already been closed and looks like a prison. Every time another recreational venue is closed, the quality of life for the people who enjoyed those sites diminishes.
We keep pandering to those that are too stupid to exercise good judgment. It seems to me, if we protect all the idiots, we simply allow them to procreate and make more idiots.
This earth is overpopulated beyond comprehension with humans. We don’t think twice about stepping on an ant or spraying a wasp nest, yet every other species save our own contributes to the ecosystem they occupy.
Humans try and manipulate all aspects of their environment, and it’s just a matter of time until mother nature decides we’ve had enough chances.
Maybe I grew up in the wrong era. I fell out of trees, wrecked my bike and broke bones, all without a helmet. Yet, I can still explain Einstein’s Unified Field Theory.
Something has gone radically wrong when we need to protect people from themselves.
Joseph Lavery, Kapa‘a
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