September 1997 |
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Annual General Membership Program Planning Meeting President's Message (Grace Furukawa) Bonnie Campbell 4th Violence Forum (Excerpt from her speech) (Bonnie Campbell) State Economic Task Force Makes Tax Recommendations (Astrid Monson) Holiday Food Drive Spread the Word Public Forum on Gambling Special League Mailings (Grace Furukawa) Membership (Annie Kim) |
State Economic Task Force Makes Tax RecommendationsIn August, League was asked to participate in the Tax Working Group of the State's Task Force on Economic Revitalization. As I had worked with Arlene Ellis and Jean Aoki, among others, on our testimony before the 1996 State Tax Review Commission and on various tax proposals before the 1997 Legislature, I was asked to sit on the Working Group. The Group met three hours each week during September, and presented its recommendations to the Task Force on October 7. League was a very small minority but a vocal one. As explained in the October Voter, nearly all the Working Group Members represented business interests. Among their recommendations were:
Other proposals which were discussed in the Working Group but were not recommended included restoring the previous graduated income tax credits eliminated two or three years ago, eliminating the remaining $27 per capita food tax credit and phasing in taxation of higher pension incomes. Increasing the GET tax was not supported, nor the concept of "revenue neutrality" – i.e., balancing tax decreases with tax increases elsewhere. In accordance with League's national, state and Honolulu positions on taxation - primarily that tax revenues should be sufficient to fund the services and facilities needed by the public and should be levied on a progressive basis in accordance with ability to pay, meaning higher rates on higher income, we submitted an alternative option. This included:
In addition, we went along with the Group's virtually unanimous proposals to reduce the corporate income tax and the pyramiding of the GET on intermediate business activities such as wholesaling. We felt these were direct benefits to business, which might actually improve the business climate, unlike the Group's other proposals. Between October 7 and October 22 the Task Force considered the recommendations of the five Working Groups and issued its own report. Some of the Tax Group's recommendations were supported, some rejected, and additional proposals were made. The Task Force's major tax recommendations now involved:
Since Oct. 22 League has spoken at various town meetings conducted by the Task Force. Has been on TV, and has had two or three articles or Letters to the Editor published in the Press. Our main points have been:
Because of many questions -- some friendly, some hostile -- about how we came to our conclusions, we prepared tables showing how the Task Force's proposals would affect the 80% of our tax payers with adjusted gross incomes under $40,000 as compared with the 20% above that amount. These have been given to all who asked for them. In summary they showed that the lower-income group would receive income tax decreases of $120 million but GET increases of $220 million, while upper-income tax-payers would have income taxes decreases totaling $280 million while paying only $110 million additional GET taxes. Along with the $200 million decrease in corporate income and pyramided GET taxes, this would mean that the 20% upper income and business taxpayers would be given a net decrease of $370 million while the 80% at the lower end of the scale would suffer an increase of $100 billion a total shift from the upper income and business groups to the lower-income groups of $470 million. As this is written the Task Force is conducting a number of "town meetings" in various parts of the State to explain their recommendations and receive questions and comments from the public. Just which recommendations will then be formulated as bills to present to the 1998 Legislature we do not yet know, of course. However, League hopes to be active in presenting testimony for or against various bills in terms of League tax policy and positions and the considerable research we have done. We welcome the participation of League members in these efforts. Call Jean Aoki or Astrid Monson to volunteer. Astrid Monson |
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