Gathering Place
By Gordon Trimble
Hawaii needs you, not
lawmakers, to become
a better place to liveThis year's legislative session ended May 1 with little to show for lawmakers' efforts. Of the 261 bills passed, most could be classified as either bad law, unnecessary law or law with unintended or unanticipated consequences.
Mark Twain observed that neither life nor property is secure when Congress is in session. So at least for the next eight months -- before state lawmakers reconvene in January -- Hawaii taxpayers can breathe a little easier.
Perhaps during this interim, Hawaii voters should think about their role in the "three E's" -- ethics, elections and the economy -- and how these elements are intimately intertwined in the workings of government. Because it is an indisputable fact that we get the government we deserve, and our democracy works well only when there is active and broad-based citizen participation.
During this past session, I saw a continuous stream of lobbyists and special-interest groups at the Capitol. Every day I saw people with their hand out seeking government's largesse. What I didn't see was you -- Hawaii's forgotten taxpayer. You should have been there demanding an end to special-interest legislation and the start of holding government accountable.
Your elected officials should not be regarded as special people, but rather as ordinary people tasked with a very special responsibility. This special responsibility is deciding which of your needs you cannot provide for yourself and which are sufficiently important for society that your quality of life will improve if we tax you to pay for them. If not, we will merely be going through the exercise of trying to bribe you with your own money.
Until you insist that the Legislature change the way it conducts its affairs, it will continue to be part of the problem instead of contributing to the solution. And you will continue to be Hawaii's forgotten taxpayer.
The cost of tax credits
Let's look at tax credits -- and it doesn't matter whether we are talking about the Outrigger tax credit, the Ko Olina tax credit, high-tech or biotech. They are all the same. Tax credits temporarily affect the behavior of businesses or citizens. For tax credits to remain effective they need to be continually raised.Everyone talks about their benefit, but no one talks about their cost. Properly viewed, they may provide some economic stimulus for a particular firm or industry, but the stimulus comes at a price -- higher taxes for everyone else. It means less tax revenue is available for other purposes. If you wouldn't give the activity tax money, then you should not give it a tax credit because that it exactly what it is -- a hand out, a subsidy.
Campaign reform
If we were to ban corporate contributions to politicians, we would see an immediate and dramatic fall in the number of tax-credit bills offered by legislators. Who would benefit? You, Hawaii's forgotten taxpayer, would benefit.Too much money spent on studying this and studying that? Ban corporate contributions and we might see government actually try to solve our traffic problem instead of merely study it to death.
Too much money spent on building government projects that don't work (think the College of Business, the School of Engineering, the university softball field)? Ban political contributions.
The same ban should apply to unions, too.
And nonprofits also cannot be ignored. Money and influence come in many forms, whether it is Bishop Estate or a garden-variety nonprofit. Any entity that receives government grants, preferential tax treatment and government contracts, or is regulated by the government should be precluded from employing or contracting with government officials or their immediate family. Anyone who holds a fundraiser while the Legislature is in session should be suspect.
Three simple steps
If you really want to get the economy growing again, forget about tax credits and look at the tax structure and the transportation infrastructure. It is really as simple as 1, 2, 3.1. Eliminate hidden taxes by eliminating the taxes on business-to-business transactions. Eliminate these taxes and you actually will bring jobs back to Hawaii when we level the playing field and stop discriminating against locally owned small businesses who proprietors keep hoping they can make something in Hawaii.
2. Foster choice in intraisland transportation. We are the only archipelago of our size in the world where jet planes are the only mode of transportation to get to another island. We are the only place without a marine highway of vehicular ferries. When you can arrive at your destination on a neighbor island in time for lunch in the same vehicle you left home in, you will expand the markets of every small business in Hawaii and will make interisland transportation more exciting and affordable to both residents and visitors alike.
3. Enable Hawaii small businesses to develop export markets overseas with more competition in ocean freight. It is not the Jones Act, which restricts foreign shipping in American waters. The real limitations are lack of pier space and port facilities and services that would enable competition to flourish and backhaul rates to develop, encouraging our businesses to expand their horizons to Pacific Rim markets.
We can get our economy going again by recognizing that our tax structure and our transportation infrastructure are limiting our economic growth and diversification. But until there is a public demand to end contributions from corporations, unions and nonprofits, you will continue to have special interests benefiting from your tax dollars and you will remain Hawaii's forgotten taxpayer.
Gordon Trimble, an economist and former trade representative and administrator of Hawaii's Foreign Trade Zone, is a freshman Republican senator representing the 12th District, Downtown-Waikiki.