WMTA Shares these commentaries, without taking a position unless otherwise noted, to bring information to our readers To view the archives of the Tax Foundation of Hawaii's commentary click here. "The president of the WMTA HAS CHOSEN NOT TO POST THE WEEKLY COMMENTARY OF THE TAX FOUNDATION OF HAWAII FOR THE WEEK OF AUGUST 18-2019, "Leadership on the Mauna," BECAUSE OF A COUPLE MAJOR REASONS.
1. FAILURE TO RECOGNIZE THE SIGNIFICANCE OF WHAT THE REAL ISSUES ARE WITH SEEMING DISRESPECT OF HAWAIIAN CULTURAL PRACTICES. 2. IT'S HISTORICAL INCOMPLETENESS AND INACCURATE DESCRIPTION OF ALL OF THE FACTS NECESSARY IN BACKGROUND INFORMATION WILL AGITATE AND INFURIATE INSTEAD OF RESOLVE. We believe that there is a way for resolution to share the mountain resources respectful of cultural practices. We are hopeful that in the spirit of Aloha, all parties will come together towards a respectful solution that the majority of Hawaiians will support for the future. Any who wish to read the Weekly commentary can go to the Tax Foundation of Hawaii link (click here)
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WMTA Shares these commentaries, without taking a position unless otherwise noted, to bring information to our readers To view the archives of the Tax Foundation of Hawaii's commentary click here. Soft on Crime – Because of the Money by Tom Yamachika
In the news recently was a stunning announcement by Justin Kollar, who is the Kauai County Prosecutor. State law says that for folks driving without a license or driving without insurance, heavier fines and more jail time apply to repeat offenders. He said that he has decided to prosecute all cases under his watch as first-time offender cases, no matter how many prior convictions the defendant may have or how quickly those priors were accumulated. Why? He said in a recent interview that the repeat offender penalties do nothing to make the roads safer, add more people to crowded jails, and trap the working poor in a cycle they can’t get out of. They can’t pay the fine and must work to earn the money to pay it, they need to drive to get to work, they get pulled over, and then they owe more money they can’t pay. Prosecutors traditionally have had wide discretion in deciding what kind of criminal charges to bring against a person, or whether to bring charges at all. For instance, a prosecutor might not charge motor vehicle drivers going 60 mph in a 55-mph zone, but may go to court when the driver has gone over 70 mph. Consider this actual example: a Delaware grandmother sent her granddaughter to her third-grade class with a birthday cake (hers) and a knife so it could be shared. The teacher used the knife to cut the cake but had to report the girl for bringing a weapon to school. The school district, which had a zero-tolerance policy on weapons, felt it had no choice but to follow that policy to the letter and expel the girl for a year. So yes, it is important that there be prosecutorial discretion. Prosecutors need it to refrain from charging cases that aren’t supported by the evidence, or to refrain from punishing people who, although violating the literal terms of the law, really haven’t done anything that the law was designed to prevent. At the same time, discretion can mask more insidious behavior such as racial discrimination (prosecuting all speeders if they are black, for example, while exercising more restraint on others) or graft (a defendant can skate, for example, if he knows the right people to pay off). This case seems to be about another issue: infringement upon the kuleana of other institutions. Mr. Kollar is an elected Kauai County official. The laws of which he is complaining are state laws. They were put into place by our state legislators and governor, who had the interests of the entire state at heart when they enacted the enhanced penalties for repeat offenders. If he has a problem with how these laws are applied to the working poor, shouldn’t he go to the Legislature and suggest appropriate amendments? Apparently, he prefers to take the matter into his own hands. Maybe he thinks that this grandstanding will help him get re-elected. But what about the plight of the working poor? The Hawaii ACLU is quoted as saying that driving without a license or insurance is only about inability to afford paying premium payments or fines, which doesn’t make you more dangerous on the road. I respectfully disagree. The ability to drive a car is a privilege, not a right. Taking away the privilege is a possible consequence of doing something unlawful. Is it fair? The folks who get whacked for driving without a license or insurance the second or third time intentionally got behind the wheel without appreciating the responsibility. Is it fair to the other drivers who must bear more costs of car-related injuries, deaths, and property damage because these folks won’t? I, for one, would rather not be on the road with people who reject the responsibility that comes with a motor vehicle. WMTA Shares these commentaries, without taking a position unless otherwise noted, to bring information to our readers To view the archives of the Tax Foundation of Hawaii's commentary click here. Witholding, the Root of All Evil?
By Tom Yamachika, President Withholding is making someone who isn’t liable for tax, but who pays money to someone who is, responsible for collecting and paying the tax to the government. Employers, for example, must withhold federal and state income taxes out of wages paid to their employees. The government also makes the buyer withhold taxes on big property sales. The federal government requires withholding when property is sold by a foreigner. Our state government also requires withholding when property is sold by a nonresident. This year, we took withholding one step further by enacting Act 232, a law that requires partnerships, estates, and trusts to withhold on income distributed to nonresidents. That law went into effect at the beginning of this year, but the Department of Taxation has come out with Announcement 2019-08 saying that they won’t be ready to enforce that law until the beginning of next year. Interestingly, the law does not apply to “publicly traded partnerships,” which are partnerships with so many partners that their partnership interests can be bought and sold on a stock exchange just like shares of stock. Under federal law, these partnerships are treated the same as corporations. The PTPs complained in testimony that it’s such a bother to make them withhold: [T]he requirement to withhold tax on behalf of nonresidents would be an extremely burdensome requirement for PTPs. Federal law does require brokers to report to PTPs specific ownership information on units held in street name, including name and address. However, this information is provided only once a year…. In other words, enough information goes to the PTPs so that they can send out federal Forms 1099-DIV to their unit holders so they can include that information in their respective federal tax returns. In the same testimony, furthermore, the PTPs offered to file an annual information return reporting name, address, taxpayer ID number, and income sourced to the state for each unit holder. That offer got written into the law. So, the PTPs can send out information returns to everyone but it’s too much humbug to cut the State a check? Forgive me for laughing. There was one more bill to require withholding – the so-called “AirBnB Bill,” which was vetoed. The bill would have required transient vacation rental platforms such as AirBnB, HomeAway, and Flipkey to withhold general excise and transient accommodations taxes on transient vacation rental units booked through those platforms. Tax compliance is the responsibility of the unit owners, but not everyone knows about or pays the taxes, so withholding would increase compliance. The Governor’s veto message says, “While requiring the hosting platforms to collect and pay the taxes on illegal transient accommodation uses would not legalize these operations, there is concern that it could be viewed as legitimizing these operations.” This message sounds like he is trying to talk out of both sides of his mouth. Withholding has nothing to do with legitimizing illegal activity. If business is being conducted, tax is owed and should be collected whether the business is legal or not. Remember, the tax laws didn’t legitimize Al Capone’s activity; instead, they put him behind bars. Rather, the real issue seemed to be that the county passed zoning laws but wasn’t enforcing them, and the prospect of State withholding seemed to be a convenient way for the counties to put the issue on the State’s back. But, counties, how about this for a solution? Find advertisements for illegal vacation rentals, confirm by online search that they aren’t registered for tax, and then rat them out to the State Tax Office! Then you can use your people to enforce your laws against other illegal rentals. |
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