Scores of taxpayers testify at GE Tax hearing

The Senate Ways and Means Committee holds an excise tax bill hearing on Wednesday.
The Senate Ways and Means Committee holds an excise tax bill hearing on Wednesday.
Bart Dame
Bart Dame

By Jim Mendoza - bio | email

HONOLULU (HawaiiNewsNow) - The majority of testifiers told the Senate Ways and Means committee raising the general excise tax one percent is not the way to go.

"You have literally taxed the shirts off our backs. Now with this excise tax you want to tax the pants off our butts," musician Kawika Crowley said.

Opposition came from all facets of industry and the non-profit sector that claim services would suffer.

"We also employ people so we're contributing to the economy. When we have to lay people off, that's going to have a rippling effect as well," said Lisa Maruyama of the Hawaii Alliance of Non-profit Organizations.

Another element in the bill suspends general excise tax exemptions for certain businesses.

Hawaiian Airlines spokesman Keoni Wagner said that would increase the company's cost by $80 million over the next three years, leading to layoffs and increased air fares.

Support for a tax increase was voiced by the Democratic Party of Hawaii and the union representing government workers.

"I think it's wrong to just stop and say, 'Hey, it's too much money.' We have to look at both sides. You have to look at the services that are being provided," said Nora Nomura of the Hawaii Government Employees Association.

"The net result of this is this is a transformation that helps shift our overall tax structure in a much more progressive direction," Democratic Party of Hawaii member Bart Dame said.

Senate democrats billed the hearing as a time for taxpayers to choose either a hike in the GET or suspending exemptions.

"That is really an unfair statement," House Republican leader Gene Ward said. "It's like saying do you want cat food or do you want dog food?"

Senate Ways and Means chairman David Ige expected opposition to the bill but said he is still short of money to balance the budget.

"The budget adopted by the Senate yesterday cut $650 million from the budget and we're still about $650 million short of balancing the budget," he said.

A one percent hike in the GET could raise $500 million a year.  But even if the bill passes the Senate it faces an uphill battle in the House.

Copyright 2011 Hawaii News Now. All rights reserved.