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. Weekly Commentary For the Week of July 8, 2018 If You Don’t Rock the Boat, How Do You Change Its Direction? By Tom Yamachika, President A little over twenty years ago, on May 6, 1998, then-Maui Mayor Linda Lingle was speaking to a group of business leaders from the Chamber of Commerce of Hawaii. Before the meeting, she was told that she could speak on anything she wanted to, but she was specifically told not to criticize any specific person in the government. She complied with the request, but she also said this: “Why is the Chamber so reluctant to speak up? The Chamber should be standing and speaking loudly and openly criticizing the policies that have brought our economy to its knees. The Chamber of Commerce plays a major role in maintaining the status quo by failing to speak up!” When many of us in Hawaii grew up, we were taught to go with the flow, that we shouldn’t rock the boat, that it will all work out in the end. Maybe that is one reason why so few of us turn out to elections. We just sit tight and hope that it all works out. And, for those of us who do turn out to vote, or to engage in campaign activities, we vote for the person we voted for before, or we support a candidate we supported before. So what if the person supported a stupid bill or said something idiotic when speaking about it in the committee hearing? He is my candidate and I support him, or she has a lot of power and I better support her or else. All of these are variations on the theme of, “Let’s maintain the status quo.” On the business side, many of us are fearful that we’ll lose customers or attract political retribution if we support a specific candidate or a specific policy or platform. Some of us contribute to opposing candidates so whoever wins will be our “friend.” Again, these are just variations on the theme of supporting the status quo. But what if we don’t like the status quo? What if we think that our economy is in the toilet and our elected officials are constantly making it worse? What if we think that real problems that we now face, like staggering unfunded liabilities for pension and health benefits for state workers, or the homeless, or invasive species, are not being adequately dealt with? We’ve got to rock the boat. If you’re walking peacefully in the park one day and you step on a huge thorn on the ground, do you just remain silent, not wanting to bother anyone around you? Of course not! You howl in pain, bounce around on the other foot, and cry for help! So, if you are suffering because of our cost of living, or you see government resources wasted or mismanaged, or you confront problems that we should be dealing with but aren’t, howl in pain! Make your sentiments known! Educate yourself on some of the critical issues we face and share your knowledge. You can even share your knowledge with your elected officials, because some of it, maybe lots of it, may be news to them! (You’d be surprised. Really.) If you have an issue you are passionate about for all the right reasons, get other people on your side too! Unions like HSTA, UPW, or HGEA, or politically active nonprofits like the Sierra Club or the Nature Conservancy, don’t have a monopoly on organizing people to support their respective causes. The more people you can convince, the more you can rock the boat. Remember, if no one rocks the boat, it will never change direction! 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. Weekly Commentary For the Week of July 1, 2018 It's Not Easy Bein' – an Employer By Tom Yamachika, President It’s tough being an employer, especially here in Hawaii. If I am a business, or even a nonprofit, in Hawaii and I want to hire paid staff, there are all kinds of things to consider. Before I hire the worker, I need to comply with laws saying what I can and can’t ask the prospective employee. I might get in trouble if I ask the prospect what he or she was paid at the prospect’s previous job, for example. If I clear that mine field and find a prospect that I want to hire (which is challenging because our unemployment rate is so low) there are laws saying I need to check on things like immigration status and documentation, or whether there is an outstanding child support obligation. When I pay the worker, I need to comply with wage and hour laws, meaning that I need to pay the worker at least a certain amount per hour, provide breaks at various times, and if I go over a certain number of hours in a week I need to provide for overtime pay. The definition of exempt employee who can be paid on a salaried basis has been shifting, so I need to be sure my understanding of that is current as well. Then, I need to set up withholding for federal and state income tax, unemployment tax, and Social Security. I need to have some required insurance in place, like temporary disability insurance, workers’ compensation, and Obamacare-compliant prepaid health care insurance. Each of the insurers then has the right to audit my operations, to make sure I am in the proper risk category. So, I can look forward to a bit of extra work whenever one of these audits takes place. At the place of employment, I need to make sure that I have a number of signs and placards that are required by federal, state, and local employment laws. There are different agencies that specify the content of these placards, and from time to time the required language changes. So, I need to have a current set of these signs and placards. Besides having all of these required items, and I probably missed some, then there are items that I as an employer need to provide just to be competitive. For the overall work schedule, I provide for paid holidays, sick leave, family leave, vacation. Providing a simple “here’s x days of paid time off,” although previously legal, now might lead to problems. Some workers want to see that employers have a retirement plan (that the employer pays into). Having one of these is not a piece of cake. When I had one, IRS requirements shifted every year, so I would have to have a law firm review the plan every two or three years, and of course the firm charged a princely sum for their services. When a financial advisor I knew found out how many employees I had that were covered by the plan (I could count them on one finger), he burst out laughing. I got rid of the plan at the end of that year. Man, it’s not easy bein’ an employer. 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. Weekly Commentary For the Week of June 24, 2018 Pray I Don't Alter It Any Further By Tom Yamachika, President A few days ago, I got my annual emailed reminder from the Social Security folks that they prepared an electronic statement for me – they’ve gone green, so they aren’t sending those statements on paper any more. So, for the first time in years, I logged in and looked at it. There, in the middle of the page, were some words that smacked me in the face with reality. Your estimated benefits are based on current law. Congress has made changes to the law in the past and can do so at any time. The law governing benefit amounts may change because, by 2034, the payroll taxes collected will be enough to pay only about 77 percent of scheduled benefits. For all these years, I thought I was paying money into an insurance system – after all, the official name for Social Security is Old Age, Survivors, and Disability Insurance or OASDI – which I thought gave me some vested benefit. The reality is that it isn’t insurance at all. OASDI is a tax, the government got my money and keeps getting my money, and although they promised to give me benefits they didn’t promise that those benefits would never change. Remember Darth Vader’s line in “The Empire Strikes Back”? “I am altering the deal. Pray I don’t alter it any further.” I am not, of course, accusing anyone or any group of malice or even mismanagement. But we need to realize that when government makes promises, sometimes those promises change. I am reminded that when our Transient Accommodations Tax (TAT) was adopted in 1986, vocal and strident opposition from the Neighbor Islands and from the tourist industry was quelled by promises that the TAT would only be needed to fund the convention center, which would benefit all islands, and then the tax would go away once the center was built and paid for. Well, the center was built and paid for, but the TAT is still with us, not on a temporary but on a permanent basis, at more than double the tax rate it was when first enacted. Moreover, a controversial “resort fee” bill now threatens to expand its scope to reach everything that a hotel charges a tourist. The deal has been altered, several times in fact, and we pray that it not be altered further. Plans and promises can also be revisited even if they are kept initially. After the Great Recession of 2008, our lawmakers pleaded with the electorate for their understanding when they enacted a “temporary” income tax hike on individuals, with new 9%, 10%, and 11% tax brackets, “just to get us through the recession.” The new brackets did indeed expire at the end of 2015. But lawmakers reinstated them in the 2017 session, effective at the beginning of 2018, to improve or expand tax credits to assist with poverty relief. The deal has been altered and we pray that it not be altered further. This year is an election year. We can go to the polls later this year and do our part to see that those elected to office can be trusted to keep their promises, or that appropriate consequences befall those who can’t. If we don’t do our part, the only thing we can do when we are affected by a tax deal that has been altered is to pray that the deal not be altered further. |
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