Sunday, February 5, 2023
Hawai'i Free Press

Current Articles | Archives

Friday, February 22, 2019
"Everyone" cannot afford another GET surcharge
By Grassroot Institute @ 2:07 PM :: 5141 Views :: Education K-12, Higher Education, Taxes

‘Everyone’ cannot afford another GET surcharge

"Everyone" cannot afford another GET surcharge

From Grassroot Institute

The road to hell is paved with good intentions … and tax increases.

In November, a proposed constitutional amendment failed in the courts, eliminating property taxes as a source of funding for the state Department of Education. Now, the Hawaii Legislature is considering another way to do the same thing — although this time they’re not pretending the tax is for only the very rich.

In fact, it falls hardest on the very poor: the state general excise tax.

Senate Bill 1474 proposes levying a 0.5 percent surcharge on the general excise and use tax in order to provide a “dedicated funding source” for the DOE and the University of Hawaii.

Once again, we are being told this will let us pay public school teachers what they deserve. As I've said before, I agree that good teachers deserve to be paid well. But nearly every problem that was in the proposed constitutional amendment is still present here, plus a few new ones.

For example, there is still no guarantee that the money would go to pay the teachers; all that is mentioned is the funding, not its purpose.

There’s also the fact that the 0.5 percent surcharge wouldn’t be enough to cover the DOE and UH budgets; they both would still need money from the general fund. In fiscal year 2018, the combined appropriations for the DOE and UH totalled $2.1 billion. But according to testimony from the state Department of Budget and Finance, the surcharge would increase state revenues by only $438 million.

Then there’s the issue of precedent. A GET surcharge has become the answer to every local spending project. So far there’s just the rail surcharge, but if we add an education surcharge, what will come next? A surcharge to deal with homelessness? Maybe one to improve kupuna care? Instead of making hard decisions about budgets and spending, policymakers will look to create a surcharge for every worthy issue.

I’ve spoken before about the “death by a thousand cuts” problem of Hawaii’s cost of living, and this is a great example. Proponents of the tax say it would be just a tiny increase — only half a cent on every dollar. But that’s the problem: These “small” increases add up: half a cent for rail, a few dollars more on your gas for the highways, a nominal fee on your car registration for another infrastructure project … Where does it end?

Moreover, to claim that “everyone” can afford another GET increase is to misunderstand the regressive nature of the tax. According to the Institute on Taxation and Economic Policy, Hawaii has one of the most unfair tax systems in the nation, and it’s largely because of the excise tax. ITEP estimates that the lowest 20 percent of earners in Hawaii spend 10.5 percent of their income on sales and excise taxes. That extra half-penny can mean a lot.

Finally, an education surcharge frustrates one of its goals. We’re told that it’s difficult to attract and retain teachers in Hawaii because of the state’s high cost of living. The exodus of Hawaii residents is enough of a problem that Gov. David Ige made it a theme in his most recent State of the State address.

So why would the Legislature enact a take hike that directly increases the cost of living? An increase in the GET has a ripple effect that makes everything more expensive. Instead of making the state more hospitable to teachers, it would make things worse.

The good intentions may be there, but a GET surcharge is not the way to help teachers. If state policymakers really want to make the state a more attractive place to teach, they should be looking at ways to cut taxes and lower the cost of living. That’s the best way to make Hawaii affordable again — for everyone.

E hana kākou! (Let's work together!)

Keli'i Akina, Ph.D.



TEXT "follow HawaiiFreePress" to 40404

Register to Vote


808 Silent Majority

ACA Signups Hawaii

Alliance Defending Freedom

Aloha Pregnancy Care Center

American Council of Trustees and Alumni


Antonio Gramsci Reading List

A Place for Women in Waipio

Astronomy Hawaii

Back da Blue Hawaii

Ballotpedia Hawaii

Better Hawaii

Broken Trust

Build More Hawaiian Homes Working Group

Christian Homeschoolers of Hawaii

Cliff Slater's Second Opinion

DVids Hawaii


Fix Oahu!

Frontline: The Fixers

Genetic Literacy Project

Grassroot Institute

Hawaii Aquarium Fish Report

Hawaii Aviation Preservation Society

Hawaii Catholic TV

Hawaii Christian Coalition

Hawaii Cigar Association

Hawaii Coalition Against Legalized Gambling

Hawaii ConCon Info

Hawaii Credit Union Watch

Hawaii Crop Improvement Association

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 Future Project

Hawaii Gathering of Eagles

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



Hiram Fong Papers

Homeschool Legal Defense Hawaii

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

Malulani Foundation

Managed Care Matters -- Hawaii

Malama Pregnancy Center of Maui

Military Home Educators' Network Oahu

Missile Defense Advocacy

MIS Veterans Hawaii

NAMI Hawaii

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


OHA Lies

Opt Out Today

Patients Rights Council Hawaii

PEACE Hawaii

People vs Machine

Pritchett Cartoons

Pro-GMO Hawaii


Rental by Owner Awareness Assn

ReRoute the Rail

Research Institute for Hawaii USA

Rick Hamada Show

RJ Rummel

Robotics Organizing Committee

Save Dillingham Airfield

School Choice in Hawaii

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

West Maui Taxpayers Association

What Natalie Thinks

Whole Life Hawaii