Cayetano's seven tax-cutting incentives, says Lowell Kalapa, Tax Foundation of Hawaii executive director, "tend to pander to specific interest groups" that could help his re-election bid.

The initiatives don't look comprehensively at how taxes affect the state and its economy, Kalapa says - nor do they address what is arguably the state's most pressing issue: job creation.

Cayetano has denied any political motivations in formulating his tax-cutting package.

But Kalapa says: "The reality is in the details ... Don't read the State of the State (address). There are many surprises in the bills; there are even poison pills."

Here's Kalapa's analysis of the bills:

Cayetano: Establish a 4 percent tax credit to encourage hotel renovation statewide, to boost tourism.

Kalapa: This proposal has so many conditions it is doubtful that it will provide much help.For example, the bill states the 4 percent credit cannot be more than 10 percent of the hotel room tax paid the previous year. "If we are going to reduce the cost of renovation and encourage people to do it, why do you have a cap on it?"

The bill limits the credit to five years - but that's just about the time a newly reopened hotel would start turning a profit.

Cayetano: Exempt from the 4 percent general tax work done by architects, engineers and planners on international projects to boost the construction industry.

Kalapa: Construction-related professionals should not be the only ones getting the exemption. The economy can be stimulated more by expanding the exemption to other professionals who work overseas. Senate money Co-Chairwomen Lehua Fernandes Salling and Carol Fukunaga concur.

Cayetano: Allow small businesses on Kauai and Molokai, hard hit by the economy, to postpone payment of general excise taxes for 18 months.

Kalapa: Notes that Cayetano's bill leaves it to Tax Director Ray Kamikawa to determine the actual length of the deferral. Also, he doubts if the tax postponement is going to help since tax revenues are generated when there is economic activity. Since Kauai and Molokai are hurting economically, that's somewhat like postponing the payment of nothing.

Cayetano: Provide a tax credit of $4,000 or 2 percent of a new home purchase price - whichever is less - for first-time home buyers who buy this and next year.

Kalapa: "A home purchase is a major expense in this down economy. That's why people aren't buying; they don't know if they're going to have a job next week." That's signaled by the state's record number of foreclosures and bankruptcies last year, he notes. "Let's deal with the economy first and make sure people have jobs."

Cayetano: Eliminate the $27 per person food tax credit and replace it with lower tax rates for low-income taxpayers. The schedule: For adjusted gross income $10,000 and less, a 100 percent tax credit; $10,001-$12,000, a 75 percent credit; $12,001-$16,000, a 50 percent credit; $16,001-$22,000, a 25 percent credit.

Kalapa: "You are increasing the taxes for those who don't qualify for the credit. Basically, you are taking away the $27 food tax credit in order to supplement the losses that might be incurred as a result of the administration's proposal. So for the people who are truly the working backbone of our community, they will see a tax increase."

Cayetano: Allow a maximum $50,000 deduction for qualified long-term health care expenses to help alleviate the high cost of caring for the elderly.

Kalapa: "It does not address why we are all concerned about long-term care - the high cost and the limited supply of long-term care beds in the state." A better approach would be for state-private sector partnerships to increase the number of beds, with the state perhaps providing land and health training at UH.

Cayetano: Permit a maximum $5,000 tax deduction for college and vocational school tuitions for four consecutive years for families earning as much as $150,000 annually.

Kalapa: The state should not be in the business of providing that sort of tax relief because taxes should be an equitable way to fund government services - not for engineering social policy.