February 2005 Home   Newsletters

March 2005

May 2005

President's Message (Jackie Parnell)
Member Speaks on Social Security (Hal Loomis)
Transit Funding Mess (Charles Carole)
Nurse Vote Count on March 26 (Arlene Ellis)

Transit Funding Mess

Honolulu City and County residents and visitors might be facing a 25 percent increase in the general excise tax if it is raised from 4 to 5 percent for transit improvements. The State Department of Taxation estimates that the increase would provide the City and County nearly $300 million in revenue for the first year. For succeeding years, the revenue would be increased by the rate of inflation and the growth of economic activities. We can assume this increased tax to be permanent.

The Tax Foundation of Hawaii has calculated that a family of four persons would pay an increase of $900 excise tax for a total of $4,480. This tax is regressive because it represents a greater percentage of the low-income family's budgets than higher-income family's budgets. The Foundation suggests using real property tax as alternative to the general excise tax.

The City and County already has the power to levy the real property tax. It can decide who is exempt and how much each category of property will pay by setting differential rates. It also has the ability to lessen the regressiveness of the tax.

The real property tax is best suited as it can be targeted to the population that will directly benefit and it would be deductible against federal and state income taxes.

The League will be discussing tax funding for transit improvements at its annual meeting on April 16th, Saturday, at the Hale Koa Hotel.

Charles Carole
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