HONOLULU (HawaiiNewsNow) - Big Island county services are underfunded by millions of dollars. This was true even before the lava came. Almost two-thirds of county spending is wages, which were negotiated statewide without county input. The county council can reduce spending at any time; no tax vote required. But anyone who thinks cutting a few programs will close the funding gaps is bad at math. We all hate taxes, but we also hate potholes and if we see a robbery we want the police to come. The legislature authorized a 1% excise tax surcharge for county government services. The Big Island council narrowly rejected a surcharge of half that much.
But for purposes of argument let's cost out a full 1% surcharge.
The Cost of a 1% Surcharge
$1 + 4% = $1.04; + 5% = $1.05. One penny.
$10 + 4% = $10.40; +5% = $1.50. 10 cents.
$100 + 4% = $104; + 5% = $105. $1.
$1,000 + 4% = $1,040; + 5% = $1,050. $10.
$10,000 + 4% = $1,0400; + 5% = $10,500. $100.
$100,000 + 4% = $104,000; + 5% = $105,000. $1,000.
I've left two things out. The first is that an excise tax, unlike a sales tax, applies each time an item is sold. Like when a wholesaler sells to a retailer. If the surcharge applies more than once, and the cost is passed on to the consumer, the consumer pays 20 cents more instead of 10 cents more, or whatever. The other thing I left out is that the seller can eat the cost if it will sell more items.