Thursday, March 28, 2024
Hawai'i Free Press

Current Articles | Archives

Sunday, February 9, 2014
You Like Tax Credits, Why Don’t We?
By Tom Yamachika @ 5:01 AM :: 3923 Views :: Tax Credits

You Like Tax Credits, Why Don’t We?

by Tom Yamachika, Interim President, Tax Foundation of Hawaii

Solar and wind energy system owners, movie and TV producers, the impoverished, those who hire workers in certain zones, those who buy durable goods to use in a business. These seemingly disparate groups have something in common, though: they are all beneficiaries of tax credits. Those who seek to enlarge or expand those credits at the legislature frequently find the Tax Foundation opposed. Why is that?

Tax credits have been adopted for all of those groups above and more, and have been proposed for countless others. Each is there to provide some kind of relief to those that need it or encourage behavior that we, as a society, think is good. Credits and incentives are common in every state, including ours. But one needs to remember two things.

First, most credits act like a blank check drawn on the state treasury. The credit statute establishes criteria, and anyone who meets the criteria (or thinks they do) can claim the benefits. If credit criteria are not tightly drafted, creatively thinking taxpayers or tax professionals come up with interpretations that make jaws drop. News surrounding the Act 221 high tech credits and the renewable energy technologies credits gives us some examples. The result often is that the actual revenue impact is either far greater than anticipated (as one prominent legislator stated, “They took us to the cleaners!”); worse, it simply can’t be measured; or even worse, it is exacerbated by a huge investment of administrative resources (such as tax auditors and attorneys general) to administer the credit (i.e., stop the bleeding).

Second, the credit necessarily causes a reduction in funds otherwise available to government. This means that either government has to get smaller (which hardly ever happens) or the rest of us who are not favored by these credits will need to pick up the slack somehow. And this part can and often does get ugly.

This year we are looking at legislative proposals to enact credits for all kinds of things. Hotel renovation and reconstruction is needed to keep the Hawai’i brand fresh and competitive, according to SB 2968.

Infrastructure tenants displaced by the Kapalama terminal modernization project need to be incentivized to reinvest in the area under HB 1702 and SB 2322. Location efficiency, namely meeting standards for affordable workplace housing or accessible and affordable mass transit, also needs to be encouraged according to HB 2085. Low-income household renters should receive additional assistance if they are elderly, according to HB 2285 and SB 2835. There are others.

What our lawmakers need to do is to consider the purpose of each tax credit, determine whether each pays for itself either in terms of actual dollars or in helping the greater community, and, perhaps most important, ensure the public has access to information about what these credits are, how much they cost, and how they are justified.

- 30 -

Links

TEXT "follow HawaiiFreePress" to 40404

Register to Vote

2aHawaii

808 Silent Majority

Aloha Pregnancy Care Center

AntiPlanner

Antonio Gramsci Reading List

A Place for Women in Waipio

Ballotpedia Hawaii

Broken Trust

Build More Hawaiian Homes Working Group

Christian Homeschoolers of Hawaii

Cliff Slater's Second Opinion

DVids Hawaii

FIRE

Fix Oahu!

Frontline: The Fixers

Genetic Literacy Project

Grassroot Institute

Habele.org

Hawaii Aquarium Fish Report

Hawaii Aviation Preservation Society

Hawaii Catholic TV

Hawaii Christian Coalition

Hawaii Cigar Association

Hawaii ConCon Info

Hawaii Debt Clock

Hawaii Defense Foundation

Hawaii Family Forum

Hawaii Farmers and Ranchers United

Hawaii Farmer's Daughter

Hawaii Federalist Society

Hawaii Federation of Republican Women

Hawaii History Blog

Hawaii Homeschool Association

Hawaii Jihadi Trial

Hawaii Legal News

Hawaii Legal Short-Term Rental Alliance

Hawaii Matters

Hawaii's Partnership for Appropriate & Compassionate Care

Hawaii Public Charter School Network

Hawaii Rifle Association

Hawaii Shippers Council

Hawaii Smokers Alliance

Hawaii State Data Lab

Hawaii Together

HIEC.Coop

HiFiCo

Hiram Fong Papers

Homeschool Legal Defense Hawaii

Honolulu Moms for Liberty

Honolulu Navy League

Honolulu Traffic

House Minority Blog

Imua TMT

Inouye-Kwock, NYT 1992

Inside the Nature Conservancy

Inverse Condemnation

Investigative Project on Terrorism

July 4 in Hawaii

Kakaako Cares

Keep Hawaii's Heroes

Land and Power in Hawaii

Legislative Committee Analysis Tool

Lessons in Firearm Education

Lingle Years

Managed Care Matters -- Hawaii

Malama Pregnancy Center of Maui

MentalIllnessPolicy.org

Military Home Educators' Network Oahu

Missile Defense Advocacy

MIS Veterans Hawaii

NAMI Hawaii

Natatorium.org

National Christian Foundation Hawaii

National Parents Org Hawaii

NFIB Hawaii News

No GMO Means No Aloha

Not Dead Yet, Hawaii

NRA-ILA Hawaii

Oahu Alternative Transport

Obookiah

OHA Lies

Opt Out Today

OurFutureHawaii.com

Patients Rights Council Hawaii

PEACE Hawaii

People vs Machine

Practical Policy Institute of Hawaii

Pritchett Cartoons

Pro-GMO Hawaii

P.U.E.O.

RailRipoff.com

Rental by Owner Awareness Assn

ReRoute the Rail

Research Institute for Hawaii USA

Rick Hamada Show

RJ Rummel

Robotics Organizing Committee

School Choice in Hawaii

SenatorFong.com

Sink the Jones Act

Statehood for Guam

Talking Tax

Tax Foundation of Hawaii

The Real Hanabusa

Time Out Honolulu

Trustee Akina KWO Columns

UCC Truths

US Tax Foundation Hawaii Info

VAREP Honolulu

Waagey.org

West Maui Taxpayers Association

What Natalie Thinks

Whole Life Hawaii

Yes2TMT