Tax­a­tion drives cost of liv­ing in isles

Honolulu Star-Advertiser - - VIEWS & VOICES - Shir­lene Ostrov, of Mililani, is a re­tired Air Force colonel, small­busi­ness owner and chair­per­son of the Repub­li­can Party of Hawaii.

On Wed­nes­day, the state Leg­is­la­ture will con­vene. It is time it ad­dresses the too-long-ig­nored ele­phant in the room: Hawaii’s for­got­ten mid­dle class. Hawaii’s grow­ing wealthy are do­ing quite well, as can be seen with the on­go­ing in­flux of in­vestor funds pour­ing in from around the globe. Where does that leave the mid­dle class, the ma­jor­ity of Hawaii’s pop­u­la­tion? Even with so many of us work­ing two (or more) jobs and liv­ing three gen­er­a­tions to a house, we are only barely sur­viv­ing. It should come as no sur­prise to see that the Hawaii we know and love is quickly giv­ing way to a place where end­less strug­gle to af­ford the ba­sics of life and the num­ber one home­less­ness rate (per capita) is the new nor­mal. Ac­cord­ing to U.S. Cen­sus Bureau es­ti­mates, 13,537 more peo­ple left Hawaii for the main­land than moved in from another state. Why is this hap­pen­ing? What is it about our great state that con­tin­ues to spur this mass ex­o­dus from Hawaii? Sim­ply put: it is the high cost of liv­ing here. Fig­ures from the Honolulu Board of Real­tors show that the me­dian price for a sin­gle-fam­ily home sky­rock­eted to a jaw-drop­ping $795,000 in 2017. As of De­cem­ber 2017, the av­er­age rent for a one-bed­room apart­ment in Hawaii was $2,399 which is a 7.59 per­cent in­crease from the year prior. Even given th­ese high rents, they are then again hit with the gen­eral ex­cise tax (GET). Com­bined with the na­tional record for the high­est cost of elec­tric­ity and the in­creas­ingly high cost of gro­ceries — pri­mar­ily im­ported from out of state via cargo ship which, un­for­tu­nately, falls un­der the un­fair Jones Act and is then taxed by the state — makes sur­vival a strug­gle for the av­er­age fam­ily.

It is im­pos­si­ble to con­tinue ig­nor­ing the real rea­son for our high cost of liv­ing in Hawaii: tax­a­tion.

The Leg­is­la­ture held a spe­cial ses­sion last Au­gust to ex­tend the tax for the ill-fated Honolulu rail project by another three years to 2030. Be­gin­ning on Jan. 1, the tran­sient ac­com­mo­da­tions tax (TAT) ap­plied to lodg­ing ac­com­mo­da­tions in the state of Hawaii in­creased by 1 per­cent, rais­ing the tax rate from 9.25 per­cent to 10.25 per­cent. This in­crease came af­ter the 2007 half-per­cent­age-point GET sur­charge. Mayor Kirk Cald­well has al­ready pre­dicted “it will still come up short.” Hawaii’s gen­eral ex­cise tax is not a sales tax. The 4.617 per­cent (af­ter rail ad­di­tions) is con­sid­ered a 12 per­cent sales tax be­cause it taxes every­thing at the business level not the con­sumer level. There are no ex­cep­tions. This means that a fam­ily pays tax on their food, re­gard­less of whether it is eaten in a restau­rant or care­fully pur­chased in a gro­cery store to ad­here to a strict sur­vival-mode bud­get. Health-re­lated ex­penses? Taxed. Home and au­to­mo­tive re­pairs? Taxed. No mat­ter how ur­gent or life-threat­en­ing, it’s all taxed. Even our pre­cious Girl Scout cook­ies are taxed. As Pres­i­dent Ron­ald Rea­gan said in his first in­au­gu­ral ad­dress in 1981: “In this present cri­sis, gov­ern­ment is not the so­lu­tion to our prob­lem; gov­ern­ment is the prob­lem.” This same sen­ti­ment ap­plies just as ac­cu­rately to the Hawaii State Leg­is­la­ture to­day as it did to the eco­nomic re­ces­sion and “stagfla­tion” of the early 1980s. With the loom­ing rail project op­er­a­tion and main­te­nance costs of $140 mil­lion an­nu­ally and un­funded li­a­bil­i­ties (i.e., gov­ern­ment work­ers’ pen­sion funds) in the bil­lions, it is im­per­a­tive that the Leg­is­la­ture re­duce the cost of liv­ing. If not, Hawaii is well on its way to be­ing a place where only the rich can live.

The Repub­li­can Party of Hawaii is ded­i­cat­ing the 2018 leg­isla­tive ses­sion to: Mak­ing Hawaii Af­ford­able Again.

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