Thursday, March 28, 2024
Hawai'i Free Press

Current Articles | Archives

Sunday, March 29, 2020
Lead. Grant relief. Don’t take more. Please.
By Tom Yamachika @ 5:00 AM :: 3377 Views :: Health Care, Small Business, Taxes

Lead. Grant relief. Don’t take more. Please.

by Tom Yamachika, President, Tax Foundation Hawaii

We are in trying times now, folks. Much of the state is closed. The Capitol and many government offices, including the Department of Taxation, are locked down. People are working remotely when they can, and we are too.

In the middle of all of this, our Governor is telling people not to come to Hawaii. That may be certainly justifiable from a public health perspective. It does, however, have severe economic effects for us. According to a recent article from the Pew Charitable Trusts, the state most reliant on tourism is Nevada, where 16% of its economy (based on 2018 numbers) depends on it. We are next with 10%. Other states that ranked high were Vermont, Florida and Tennessee, all at about 6%. Currently, we are projecting a $300 million decline in tax collections and a loss of 6,000 jobs in the service industry. This may reverse in six to nine months or so, according to the Pew article, because once the crisis passes people will want to travel again, away from the homes they have been cooped up in.

The Federal government, including the IRS, is helping out with a just-passed law that makes sure that workers in general can get paid leave for child care and sick leave for themselves, and gives medium to small businesses a tax credit to help them pay for these benefits.

What can we expect out of State government?

So far, the response from the Department of Taxation is that all tax deadlines are being maintained. No change. Perhaps it’s disappointing, but it’s realistic in that the federal government can print money while state governments can’t.

The economy is hitting the skids and tax revenue is screeching to a halt as well, which may put us into a disastrous spiral. Government continues to trundle along, and the workers that are keeping it moving need to be paid. But the money to do it in the short term is not going be coming from tax collections. So, what can we expect?

First, we can expect government to scrutinize favored industries about dialing back tax and other benefits that were previously granted. Legislators already have started to do this.

Second, we may see renewed vigor in what used to be semi-earnest attempts to raise taxes and fees. Several revenue-raising bills used to advance in the legislature, presumably to keep the bill supporters happy, and then would die at the last minute in conference committee. This time, the outcome may be different.

Third, we may see attempts to appease the general public by advancing relief bills. Maybe we will see proposals to lessen the waiting time for getting unemployment insurance benefits, or to extend tax filing or payment deadlines, or provide additional benefits to employers whose workers couldn’t come in to work. Those might advance in the legislature when the legislature resumes, and then die at the last minute. “Oh, we don’t have the money to provide such benefits,” they may say, with justification.

Our take on the problem is this. Raising taxes and fees will put a damper on the economy at a time when we should be doing everything in our power to support it. As the American Legislative Exchange Council put it in 2018, “Data clearly shows that low tax burdens enhance a state’s chances of performing well economically. On the other hand, a high tax burden reduces a state’s chances of performing well. Of course, other policy variables impact economic performance, but tax burden is most consequential.” We urge lawmakers to resist the urge to follow the somewhat cynical predictions made above. Lead. Grant relief. Don’t take more. Please.

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