No GET Increase, says Tax Review Commission chairman

Interesting interview of Tax Review Commission chairman, Randy Iwase.  In it, he explains why he and the commission he heads is against a rise in the GET.

Q: Most of the focus was on the GET proposal, right?

A: Yeah, because guys get all excited when you hear talk about GET. I’ve been around politics for a long time: You mention GET, and people wake up. Unfortunately, they ought to wake up for other things.

Q: But you would agree that the GET tends to compound on everything, so there’s a reason why people get upset about it?

A: The pyramiding? You know, the pyramiding issue is one issue. I think it’s more general. People don’t like tax increases, period. You could talk about income tax increases and get the same reaction.

Now, that’s why the first recommendation we make is Simpson-Bowles. What we understood was, if you address this picture solely from the revenue side, we’re talking about just a GET increase to 5.666 percent.

Q: That includes the Oahu transit surcharge?

A: No. On Oahu, it would be 6.166 percent. … So that’s tough. It’s a rough issue. So we said you gotta deal with it from both the revenue and an expenditure side; we cannot do it. We recommend a Simpson-Bowles-type commission, so that you can, first, have a commission that can look at both. Second, my hope is, as was the hope for the federal fiscal commission, that it would be funded.

We were not funded adequately. … And the tax department — and this was another thing we had in the report — the staff was depleted. … So we were handicapped that way.

Second, unlike the Legislature, which has to run around every session with a myriad of issues, and they become consumed by the present — you can’t look forward out into the horizon, because you’re consumed with what’s gotta be done today. This commission can drill down on that specific issue: We’ve got this shortfall — what do we do?

Finally, my hope is that such a commission includes all of the stakeholders, because they ought to come to the table. Business, labor, nonprofits. … Representing their various constituencies, they will see and come to understand what we have, that this is a very serious problem. It’s not a tax problem only, it’s an economic problem.


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