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Friday, February 2, 2001

Hawaii State Seal

GOP loses ground
on tax-cut proposals

By Richard Borreca

State House Republicans have lost the first round in their effort to cut taxes on food and health-care services.

Legislature The House Economic Development Committee killed two bills and deferred another bill dealing with the tax breaks, despite a plea from Rep. Galen Fox (R, Waikiki), House GOP leader, that the tax cuts would help Hawaii's poor.

"It is a struggle to live in Hawaii -- we must go in and provide relief to the people who need it," Fox said.

Also supporting the bill was Bette Tatum, state director of the National Federation of Independent Business, who said the excise tax on food and health care "hurts the little guy."

"Chronically ill, the elderly, disabled, pregnant women, children, disadvantaged are all especially being hurt by taxing basic human needs," she said.

But the GOP is facing resistance from an unlikely quarter -- the Hawaii Tax Foundation. The executive director of the privately sponsored foundation, Lowell Kalapa, said Hawaii would be better off simply reducing the excise tax instead of cutting the tax just on food and health care.

"If the GOP is really talking about tax reduction, it would be more fair to cut taxes across the board, and give it back to everyone," Kalapa said.

Rep. David Pendleton (R, Maunawili), however, said the GOP wants to target the tax relief to those who need the help the most.

"If you wanted to spread it around the entire population, millionaires and those in poverty you could, but we wanted to target those who would spend more of their income on food and health care," he said.

Democrats, meanwhile, are considering giving tax credits for food and health expenses. The credits would be deducted when filing a tax return. But, Pendleton said, tax credits would not help those on welfare who file no tax return or those living on a pension, who also don't file taxes.

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