Editorials
Tuesday, October 15, 1996
Tax reform proposals
should be considered
TAX cuts are an issue in the presidential election campaign, which makes the proposals of the state Tax Review Commission timely. They seem somewhat out of step with the Cayetano administration, which has been struggling to meet a budget shortfall by eliminating tax credits to increase revenue as well as by cutting spending.
Still, the proposals should be taken seriously as a way to make the tax code more fair and productive. The commission's assertion that the tax system currently generates sufficient funds and the state's current fiscal problems are not signs of "revenue inadequacy" is welcome. Hawaii needs slimmer, more efficient government, not heavier taxes.
The commission recommends a reduction of the 4 percent general excise tax, a major source of state revenues, to 3.5 percent if not lower. It figures this could be achieved by eliminating tax breaks for such interests as oil refiners, sugar-cane producers, labor organizations and certain contractors. It wants to phase out exemptions intended to encourage new industries and the $2,000 exemption for the blind, deaf or totally disabled and the exemption for leprosy patients.
The commission wants to simplify the tax code by eliminating exemptions that are aimed at implementing social policies but are granted without regard to need. It also recommends taxing pensions of more than $60,000 a year, ending the current state exemption of all pension income, which is not consistent with federal tax law and which seems an unfair tax break for upper-income people.
These steps would help offset recommendations to ease the tax burden of lower-income taxpayers. For example, the number of people who would pay income tax at the highest rate of 10 percent would be reduced, by raising the level of adjusted gross income at which the highest rate would kick in. In the case of single taxpayers, this would be $40,000 instead of the current $20,000. The commission also would increase the state's standard deduction. For married couples now receiving $1,900, it would increase to $2,600.
These steps and others recommended would help people at the lower end of the income scale, where tax relief is most badly needed. If this can be achieved while maintaining revenues, the Legislature should give the idea serious consideration.
Campaign gifts
THE Republicans are trying to make an issue of contributions to the Clinton campaign by foreigners. It's unlikely that they will uncover anything damaging enough to affect the course of the election, but the matter seems worth investigating in any case.
The fact that the Democratic Party returned an illegal $250,000 donation from a South Korean company - only after the Los Angeles Times inquired about it - is evidence that the law has been skirted if not blatantly violated, despite Clinton administration denials.
Obscenity on TV
THE decision of the city prosecutor against bringing obscenity charges in the case of the "Blue Hail" video that was shown on a public access television channel here leaves the public to wonder whether anything goes on television nowadays.
Considering that the video reportedly included graphic scenes of oral sex, we have to wonder what it would take in the way of content to persuade the current prosecutor and his staff to prosecute for obscenity. Perhaps the current candidates to succeed Keith Kaneshiro should be asked to state their positions on the question. Is public access television - and perhaps the commercial channels as well - to be wide open to pornography in Hawaii, or is the prosecutor's office willing to stop it?
Published by Liberty Newspapers Limited Partnership
Rupert E. Phillips, CEO
John M. Flanagan, Editor & Publisher
David Shapiro, Managing Editor
Diane Yukihiro Chang, Senior Editor & Editorial Page Editor
Frank Bridgewater & Michael Rovner, Assistant Managing Editors
A.A. Smyser, Contributing Editor