• Airport and aloha • Mahalo to KIUC workers • On tax cut proposals Airport and aloha My husband and I share our time between Denver and Kaua‘i. During our last visit there was a letter concerning the airport security,
• Airport and aloha • Mahalo to KIUC workers • On tax cut proposals
Airport and aloha
My husband and I share our time between Denver and Kaua‘i. During our last visit there was a letter concerning the airport security, an elderly woman and the lack of aloha shown the traveler. I don’t know if the security company responded to the event or not.
Now on national news and in the Denver Post newspaper, I learned of the security guard kicking out travelers who were stranded due to a canceled flight — the rain was the reason.
Who hires and trains these people? I could think of several alternatives to evicting these passengers. They were pictured sleeping in a shelter with a blanket and no bed. Since they had been celebrating their 50th anniversary they were not kids.
The airport needs to focus on traveler comfort and helping them, not shunting them to a shelter or making fun of them and calling them liars as happened in the first instance.
Eva Holmes, Denver, Colo.
Mahalo to KIUC workers
I just want to thank the workers of KIUC for their quick and efficient repairs on the power outages the past week. We lost power at least three hours a day for a few days, but only a few hours. These people were working in horrendous conditions of rain, wind, falling trees and landslides. Thanks, workers.
I wish I could give praise to the board of KIUC. They are still going ahead with the “smart meter” plan. Notice you haven’t heard anything from the board members. Why? Because they know they can sit back and it’s going to happen anyway. Then they can bring on the multi-level tier system, raise rates, then pat each other on the back and vote themselves a pay raise.
There is something you can do. Two of the present board members are up for re-election. Vote them out. Notice there are only three candidates that were nominated by petition. The rest were nominated by the nominating committee, in league with KIUC management already.
They will most likely fall in line with the existing board. Another “old boys club” so prevalent in local politics.
Another thing you can do is use less energy. Conserve. The cheapest energy is that you don’t use. Or do nothing and watch the rates climb. It’s your vote and your money.
John Humphrey, Hanalei
On tax cut proposals
Tax cut proponents often cite the economic boom that followed tax reductions during the Reagan administration as evidence that low taxes result in high economic growth.
They also reference the Laffer Curve (Economist Arthur Laffer’s curve shows that tax revenue is zero at a tax rate of 0 percent and then rises to a maximum at some unspecified tax rate before declining to zero again at a rate of 100 percent; the decline being caused by high taxes creating a disincentive to produce) and put forth data that shows tax revenue increasing immediately after tax reductions go into effect in an attempt to show that we are on the downside of Laffer and should therefore cut taxes.
The problem with these arguments in favor of tax cuts is that the existence of the Reagan boom, the existence of a downside of the Laffer curve, and spikes in tax revenue following tax cuts are all good points, but not good enough to withstand the fact that the US economy has performed roughly the same regardless of tax policy.
An examination of gross domestic product of the United States over the last 60 to 80 years is devastating to these arguments for tax cuts. GDP growth varies widely since the 1930s and in a narrower range after World War II, but there is no discernible correlation between GDP growth and tax rates.
Eliot Spitzer plotted GDP growth from 1930 to 2010 on a graph along with the top marginal tax rate over this time span, and the lack of correlation was apparent.
While Spitzer’s graph only included the top marginal rate, plotting almost any other rate shows a similar lack of correlation because the performance of the economy as measured by GDP does not correspond to any significant changes in tax policy.
This lack of correlation belies the notion that we are on the downward side of Laffer because Laffer’s downturn doesn’t occur until taxes cause a substantial reduction in GDP.
Spikes in tax revenue do follow most major tax cuts, but they have nothing to do with an increase in GDP.
These spikes are likely caused by business people simply shifting revenue from a period of higher taxation to a period with lower taxes, and the spikes are inconsequential to the tax rate debate if this is the case.
As for the Reagan boom, it is just one part of the much bigger data set, just like all the other booms and downturns over the last 70 years or so, and it could be attributed to other causes such as the Federal Reserve lowering interest rates and/or a normal business cycle moving into recovery.
Furthermore, the economy has fared less well in more recent years with even lower tax rates than were in place under Reagan.
With W. Bush’s cuts in place at sub-Reagan era levels, the economy was shrinking at an astounding 8.9 percent annual rate during the last quarter of 2008.
So does this mean we should raise taxes?
No, it only means that varying tax rates within the range that we’ve seen in recent history does not substantially affect economic output, that we are on the upside of Laffer, that cutting taxes will decrease revenue, and that increasing taxes will increase tax revenue.
Craig Berry, Kapa‘a
