Opposition to raising
excise tax is growing

Associated Press

Opposition continues to build to the state Economic Revitalization Task Force's plan for an increase in the state's general excise tax as part of a tax reform package.

This time it's the state's tax lawyers and certified public accountants who are opposing the GET increase as part of a plan to boost the state's economy.

The Tax Section of the Hawaii State Bar Association has issued a statement that it is not clear that a excise tax increase coupled with lower income tax rates will help jump start the economy.

"This will not stimulate new business ventures, which often produce little if any profit in the start-up years, but will have to pay a higher GET immediately," the group said.

The Hawaii Society of Certified Public Accountants said that although a restructuring of the tax system is needed, the task force's plan lacks "sufficiently refined, detailed and substantial data to accurately quantify the economic impact of those measures."

The tax lawyers discounted Gov. Ben Cayetano's argument that an increased GET would export much of the tax burden to tourists. "As a vacation destination, Hawaii faces intense worldwide competition. A tax increase makes Hawaii more expensive relative to other destinations," the group said. "Collecting a few more dollars from each visitor does not necessarily produce much net gain, if the number of visitors is reduced."