Editorials
Thursday, April 16, 1998

Legislative deadlock
on tax reform package

THE state Senate and House have passed sharply differing versions of tax reform and will try to somehow reconcile their differences before adjourning.

It is an understatement to say that there is no consensus on the Economic Revitalization Task Force's proposal to increase the 4 percent general excise tax to 5.35 percent, the main issue before the Legislature.

Realizing the strength of the opposition, Governor Cayetano knocked the proposed increase down to 4.5 percent, but even that more modest proposal was opposed by 23 of the 51 members of the House and was rejected outright by the Senate -- even though Senate President Norman Mizuguchi was one of the sponsors of the task force and signed on to its recommendations.

Cayetano scoffed at the Senate plan, calling it timid and saying he'd rather have no reform at all than one that "does not make any bold advances and also requires us to cut deeply into government services." He may get his wish.

The concept behind the GET increase is to foist more of the state tax burden on tourists. Residents would get reductions in their income taxes and tax credits that would theoretically more than offset the excise tax increase. Tourists, who of course don't vote in Hawaii, would receive no such offsets. In addition, the hotel room tax would be increased to further shift the load to tourists.

The result supposedly would be that residents would have more disposable income that they would spend, with the result that the economy would be "revitalized." The assumption is that tourists wouldn't spend less despite the tax increases -- although no one can be sure that would be the case.

However, a lot of people aren't buying the theory, and the result is the current deadlock. Small-business operators are strongly opposed, seeing the GET increase as an additional burden when they are struggling to survive in a weak economy. Liberals, including even the Democratic Party chairwoman, Marilyn Bornhorst, view the increase as hurting the poor. Retirees who pay no state income tax on their pensions say they won't benefit either.

The Senate tax package is also flawed because in the absence of an excise tax hike it would require deeper cuts in state spending and personnel to pay for reductions in the income tax -- cuts that will be fought by the government employee unions as well as the beneficiaries of the affected programs.

The attempt to provide reductions in state income tax rates is intended to lift the state out of economic stagnation. But that very economic weakness makes tax cuts more painful because it has hurt state revenues and forced budget cuts even in the absence of tax cuts. Moreover, cutting state spending and laying off state employees won't stimulate the economy.

Cayetano, complaining about the resistance to his tax package, said Hawaii was one of the most provincial places in the country. In other words, he was saying, well-informed, sophisticated people would support the program. If you're not on board, you're provincial.

It's not that simple. There are legitimate differences of opinion on this issue -- even within his own party -- and the governor had better get used to it.

Flouting treaties

THE notion that the United States, champion of human rights, could itself be accused of violating the rights of a foreign citizen on American soil should not be routinely rejected. Doing so would be hypocritical. It also could endanger Americans who run afoul of the police while abroad. Those implications should have been given greater consideration before the execution of a Paraguayan man convicted in Virginia of murder and attempted rape.

Angel Francisco Breard's fatal assault on neighbor Ruth Dickie in the Virginia suburbs of Washington, D.C., in 1992 is not questioned. The 32-year-old Paraguayan alcoholic confessed to the murder but claimed he was under a Satanic curse placed on him by his ex-wife's father. He rejected a plea bargain that would have spared his life, going to trial instead. He was convicted and sentenced to die by lethal injection.

Under a provision of the Vienna Convention on Consular Relations, foreign defendants are accorded the right to meet with consular officials of their country. Paraguayan officials might have advised him of the foolhardiness of his defense and urged him to accept a plea bargain.

Virginia prosecutors conceded that Breard's rights under the treaty were violated by the failure to inform him of these rights, but argued that the issue should have been raised with state appeals courts that upheld the death sentence. The U.S. Supreme Court refused to address the issue because it had not been raised at the state level, a legal Catch-22.

The Paraguayan government protested to the Supreme Court to no avail. Secretary of State Madeleine Albright, at the urging of the powerless World Court, asked that the execution be blocked. Virginia Gov. Jim Gilmore refused to do so, saying a delay "would have the practical effect of transferring responsibility from the courts of the (Virginia) commonwealth and the United States to the International Court."

Blocking the execution would have done nothing of the kind. It simply would have recognized the need for action by the executive branch where judicial rulings had come into conflict with a treaty commitment. The Breard execution is likely to be raised wherever the United States tries to assert a leadership role on the issue of human rights and could result in deprivation of the rights of Americans abroad.

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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