2 top business leaders favor raising general excise tax


POSTED: Friday, April 24, 2009

Several Honolulu business leaders, critical of the tax increases passed this week by the state Legislature, said they would have preferred raising the state's general excise tax instead.

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Mike McCartney, president and chief executive officer of the Hawaii Tourism Authority, and Carol Pregill, president of the Retail Merchants of Hawaii, were asked which tax they would prefer to see increased, and both said the GET was preferable to the income tax and hotel room tax.

The pair and Jim Tollefson, president and chief executive officer of the Chamber of Commerce, appeared before a meeting of the Business Banking Council.

Tollefson declined to answer the question, but McCartney and Pregill, who said they were speaking personally and not for their organizations, said a GET increase would be better.

“;It is one of the more effective tools to use,”; said McCartney, a former state legislator. “;It is across the board. I would say yes, if it were very slight and you could also give tax credits to the most needy people.”;

Said Pregill, “;Retail merchants historically hate all taxes. If we look at an increase in revenue for the state, that would be most manageable from the standpoint of the business community and the standpoint of government—a small increase in the GET would be the most manageable.”;

The statements are significant because the Democratic legislative leaders have stressed that they were raising the hotel room tax and the state income tax because they did not want to raise the GET.

Rep. Marcus Oshiro (D, Wahiawa-Poamoho), House Finance Committee chairman, said the opinions come late in the discussion because the Legislature has already sent five tax bills to Gov. Linda Lingle. But he added the issue could still be revisited.

Rep. Joe Souki (D, Waihee-Wailuku), former House speaker, said he tried to push through a tax reform program that called for lowering the income tax and dropping the tax on food and medicine while raising the GET. The plan was rejected, but Souki says it would still be a viable way to go.

“;It would give local people options and put the tax on visitors,”; Souki said.