Category Archives: Taxes

Lobbying On The Taxpayer’s Dime

When you picture special interest groups and government lobbyists, you probably imagine corporate fat cats hiring sleazy lawyers to get them favors and interests from legislators.  (This also indicates that you’ve heard too many John Edwards speeches.)  Putting aside whether the unfairness of this image (unfairness to the business owners, that is–I wouldn’t dream of trying to defend the lawyers), it turns out that it doesn’t even correctly identify Hawaii’s biggest lobbying spenders.  Want to know who spent the most money trying to influence Congress so far this year?

You.

Or more specifically, Hawaii’s taxpayers.  It turns out that in the first quarter of the year, government agencies in Hawaii spent more money lobbying in Washington, DC than private business did.  According to Hawaii Reporter, Hawaii state and local government spent about $185,000 on DC lobbying, compared to about $122,500 from Hawaii’s private businesses over the same period.  Unsurprisingly, the biggest state spenders were the Office of Hawaiian Affairs (which continues to push for the Akaka Bill) and InfraConsult, Inc. (which lobbies on behalf of Honolulu’s rapid transit project).

Yes, the state spends taxpayer dollars to lobby in Washington for more taxpayer dollars.  (And on behalf of issues that have significant public opposition back here in the Islands.)  And then they raise our taxes.  If that isn’t an argument for more fiscal accountability in our spendthrift government, I don’t know what is.

Interior Ignorance, Caught on Tape

Want to know how big and unusual an endeavor a research project like the 4hawaiiansonly site is?  As of October 2010, the Federal Register listed 565 Native American tribes as Indian Entities Recognized and Eligible To Receive Services From the United States Bureau of Indian Affairs. Federal funds flows to those tribes, just as it does to Native Hawaiians, but as you can see in the video below (captured at the 2010 CERA Conference), even the Department of the Interior doesn’t know the scope of the money involved.  Watch carefully as George Skibine, Director of the Office of Indian Gaming within the Department of the Interior and Acting Assistant Secretary of the Bureau of Indian Affairs, confesses that the federal government doesn’t really follow the money, and clearly isn’t interested in doing so:

Weekend Updates

It has been a great couple of weeks for our friends at Hawaii Reporter, who even scored a Drudge mention and a Tonight Show one-liner out of their coverage of the Obama family vacation (see below).  So how about a quick round-up of things that cost us money?

John Carroll has an examination of the Jones Act and how it damages the Hawaii economy.  You know, the Jones Act debate isn’t exactly glamorous.  Most people can’t even get past the fact that it’s about maritime law before getting a tad sleepy.  But if you live in Hawaii, this is important.  Ever wondered why you practically need to a second mortgage in order to buy a box of cereal?  The Jones Act is the answer.  A small group of politicians and activists have been trying for a long time to get a Hawaii exemption to this federal law, and it’s time that their reforms got a fair hearing.

And then there’s the analysis of how the current Administration’s policies are going to mean higher gas prices.  Not good news for those in the Islands–where even when things aren’t bad, mainlanders blanch at our average per-gallon cost.  And no, the answer is not light rail.  Higher fuel prices trickle down, and it’s about more than just what you pay at the pump.  You pay those higher gas prices when you buy bus tickets, toilet paper, and just about anything else.

And finally, a lighter note.  Here’s the Tonight Show monologue with the mention of the Obama vacation cost.

Putting the “Fun” in De-Funding NPR

Confession: I do not listen to National Public Radio.  Except in cabs.  I have no idea why taxi drivers so universally listen to NPR, but there’s probably a very dull sociological paper in there somewhere.  Admittedly, my NPR aversion is not even particularly interesting confession material.  Outside of the beltway, I think people would be more surprised to hear that I did  listen.  If that were the case, I’d probably be besieged with questions like “Why?” and “Do you have anti-boredom superpowers?” and “Really, why?”

Now there are tons of arguments that are often put forward for the continued use of federal tax dollars to support National Public Radio.  Most of these may have been persuasive in 1958, but in the age of the information superhighway, seem almost quaint.  And the notion that government-funded broadcasting is going to be somehow more unbiased or pure is beyond laughable.  The political bias at NPR is so legendary and ingrained that conservatives don’t even bother to complain about it most of the time.

In the end, it seems like habit and tradition (as much as anything else) are what keep the tax dollars flowing to National Public Radio.  Well, that and the fact that (compared to certain other government expenditures) it doesn’t seem like such a huge expense.  (This, of course, is silly thinking, but no less powerful for that.  Of course, you’re not going to throw a dollar out the window just because it represents a comparatively small part of your income.  But who hasn’t experienced the effect of relative cost?  In other words, the effect of looking at a list of things with such high dollar amounts that something on the low end of that group seems like a bargain in comparison.  Incidentally, this also explains why I bought a pair of $250 shoes last week and felt like I got a deal.)

Anyway, if you’re interested in joining the campaign to de-fund NPR, head over conservativehq.com and sign their petition.  For me, it would be worth it just to cut down on the frequency of my tense political discussions with cab drivers.

Account(in)ability

Imagine for a moment that you had a few thousand dollars in loose change and bills behind the cushions of your couch, in your old jacket pockets, a spare wallet or two, and spread out through a few pairs of pants.  How big a jerk would you be in this situation if you then went to your best friend, told him you were totally broke, and asked to him to give you money to pay your rent?  If you answered, “No more a jerk than your average local politician,” you win.  Congratulations!  You truly understand the nature of Hawaii politics.

According to a recent report from the Grassroot Institute of Hawaii, the state has more that $1.4 billion in unspent excess funds sitting in “special funds” accounts–several of which have long been noted by the state auditor for repeal.  What is a “special fund”?  In short, it’s a little niche set-aside of state money for some specific purpose–say, public art education–funded through anything from state license fees to legislative appropriations.  You may recall that the 2009 Legislative Session included a finance bill that gave the Hawaii director finance authority to “raid” these special funds if necessary to pay government expenses.  This, not unnaturally, got some of us wondering exactly how much money there was available in these state special funds.  In light of the nearly relentless efforts to raise taxes and raid our wallets, the knowledge that there are untold millions of state dollars sitting around in untouched “special funds” is just a wee bit infuriating.

Thus, the Grassroot Institute launched its own investigation into the extent of Hawaii’s “special funds”.  You can read the full report here, but some highlights include:

  • In a review of 20 State Department reports, they found 186 accounts identified as special funds.
  • This accounts amounted to a combined excess balance of $1,412,357,203.
  • Divided equally among the population of Hawaii, these combined excess balances have a refund value of $1090.47.
  • The Hawaii Department of Transportation was the worst offender, with $582,449,161 reported as unspent, while the Hawaii Health Systems Corporation had the smallest excess at $34,837.

Really, how outrageous is the situation when the smallest, most responsible excess is still more money that many Hawaiians make in a year?  An economist once pointed out that there are four ways to spend money: 1. You can spend your own money on yourself, in which case you look for the best possible value in quality and price; 2. You spend other people’s money on yourself, in which case you look for the best quality and damn the price; or 3. You spend your money on other people, and look for the best value in terms of price and might compromise on value; and 4. You spend other people’s money on other people, and to heck with quality, value, price, or anything other than getting home from work a little earlier than usual.  Most government spending–especially as practiced in Hawaii–falls into Category 4.  We get nothing but sob stories from every possible state representative about lack of revenue.  We get tax increases and “Furlough Fridays” and guilt trips about the plight of government workers.  And all this time, they’ve been hoarding funds to the tune of $1.4 billion.  It boggles the mind.

Death and . . . well, you know

So, who do you think pays the most in state taxes in the US?  New Yorkers?  That would have been my guess, simply based on how legendarily expensive it is.  (Not to mention how bad a beating my wallet takes every time I go there.  Ok, technically speaking, the nice restaurants shouldn’t count as a New York tax–it’s really more of a tax on me for not living in NYC.)  So then, if not New York, maybe Massachusetts?  Don’t they call it “The People’s Republic of Massachusetts”?  If a strong tradition of Northeastern liberalism doesn’t result in a hefty tax bill, then nothing will.

Yes, New York and Massachusetts both make the top 5.  But for a sheer, soul-crushing, burdensome tax scheme, no other state can beat Hawaii.  That’s right.  We’re #1! We’re #1!  I quote the San Francisco Chronicle’s recent article on the states with the greatest individual tax burden on their residents:

  • Hawaii
    The Aloha State may be renowned as one of the most beautiful states in the Union, but that beauty comes at significant cost: the average Hawaiian paid out $1,010 in state taxes in the first quarter of the year, the highest of any state. The two biggest components to the state’s revenues were income and excise taxes.

    Unlike many other states, Hawaii doesn’t have a sales tax – instead, Hawaiians pay gross receipts (or excise) taxes on each of their purchases. That means that items like rent, medical bills and food are all taxable purchases in Hawaii, unlike other states with traditional sales tax. That also means that tax-exempt non-profits have to pay out Hawaii’s excise tax regardless of their status in other states. (Real estate costs in Hawaii are also high. Read more, in Simple Ways To Save In Retirement.)

  • Read more:

    http://www.sfgate.com/cgi-bin/article.cgi?f=/g/a/2010/07/21/investopedia45833.DTL#ixzz0uuya68km

    How bad is it when San Francisco feels sorry for you?  Damn. (In case you’re wondering, rounding out the top 5 are Connecticut, New York, Minnesota, and Massachusetts.  A small, mean part of me feels that higher taxes are no less than those residents deserve for having the Patriots, Red Sox, Yankees, Giants, Jets, and Vikings between them.  Hawaii’s number one and doesn’t have so much as a professional soccer team to its credit.  How’s that fair? )
    So could you use an extra couple of thousand dollars a year?  (Double for couples where you both work.)  Because this is where our decades of high-tax/high-spend policies have landed us.  With an individual tax burden higher than any other state in the US.  Personally, I think it’s time we start asking our legislative and gubernatorial candidates some hard questions about their tax policies.

    Casinos–Now With a Different Kind of “Stimulus”

    Today, I have a guest article for you from Elaine William of CERA (Citizens Equal Rights Alliance).  Many of those who are acquainted with the problems of tribal law, federal policy regarding tribes and reservations, and the financial issues that abound there are watching Hawaii carefully to see how those same factors will come into play if the Akaka Bill passes. If you’re concerned about Akaka, these are issues that you cannot afford to overlook.  (And for those who are interested in the complex problems that arise out of the conflict between civil liberties and tribal government, you’ll want to check out their website at www.citizensalliance.org.)

    Indian Casinos:

    The New Industry That Is…Too Big To Fail!”

    By Elaine Willman, Board Member

    Citizens Equal Rights Alliance

    Imagine a major Indian casino, the Mohegan Sun in Connecticut, reporting that its slot revenues reported to the state in April have “stabilized,” slipping only 1 percent. The same casino reported $1.3 billion (with a “B”) in gross revenue for 2009. However, the economy is still dark, customers have less disposable income to slough into the tax-exempt slots, and the casino is facing a $15 million lawsuit for a head-on wreck caused by a drunken customer.

    So every member of Connecticut’s congressional officials (except for one on travel) wants to ensure that the Mohegan Sun does not fail; that its “job creation” is always protected. These fool elected officials have promoted and now awarded Stimulus funding of $54 MILLION dollars) in the form of a guaranteed loan from USDA to this mega-wealthy tribe.

    And if they default? No problem. Tribes have sovereign immunity. Taxpayers whose taxes are already annually subsidizing this and 565 other Indian tribes in 35 states for all basic needs—housing, health, law enforcement, roads, environment, scholarships, language, cultural preservation—Yes, you and I, our children and grandchildren, will just continually pay off the casino debts in perpetuity across the country.

    Taxpayers get to: 1) annually fund all basic needs of tribal governments: 2) cover all tribal uncollectible debt due to “sovereign immunity;” and 3) keep throwing dollars into tax-exempt tribal slot machines across the country so our local economics get sufficiently and systematically drained of tax revenues and small businesses. To make this work, taxpayers must faithfully commit to frequenting tax-exempt tribal government businesses. But now it doesn’t matter if you choose not.  They’re too big to fail; the federal agencies will step in and bill you for their losses, anyway.

    There are 245 other tribes in the lower 48 states entitled to the same perks as the Mohegan Sun. Fortunately, the 228 tribes in Alaska who receive the basic-needs funding, at least don’t have casinos yet. Alaskan tribes are non-profit corporations without jurisdictional authority or gaming so they focus almost entirely on their culture. What a concept!

    First a few facts:  565 federally recognized (tax-exempt) tribes are located in 35 hosts states, of which 246 tribes are gaming under the Indian Gaming Regulatory Act of 1988.  Every host state to numerous tribal tax-exempt and tax-eroding tribal governments and reservations are coincidentally the states experiencing the largest state budget deficits.

    The impossibility is calculating the annual cost of this race-based socialist system spreading across the country. Commerce Secretary Gary Locke reports $94 million in Stimulus Funding for the tribes in Washington State alone. We’re hearing 4 billion annually just for tribal health care; many more billions for housing, law enforcement, etc. And these dollars do not include the “Tribal Priority Allocations” doled out annually by the Bureau of Indian Affairs. There are 29 federal agencies – each with a separate budget for funding the 565 tribes. And worse, state governments that have no “trust relationship” with Indian tribes  (such as Washington, Oregon, Montana and others) have set up separate state budgets to supplement federal dollars going out to tribes. Strike Two for taxpayers.  All of these federal and state dollars are serving less than 1 million enrolled tribal members of our 300+ million American population.

    Who can blame the Native Hawaiians for wanting in on this lucrative industry, forever chaining down American citizens to the galley oars of a feudal federal Indian policy system? Pray that the Akaka Bill (Native Hawaiian Government Reorganization Act) fails again in Congress this year, or these numbers will considerably worsen.

    Since the Indian Reorganization Act of 1934 federal Indian policy has been a 76-year private conversation between federal agencies, elected officials and tribal leaders, with the whopping bills deducted from your federal and state tax contributions annually. We simply can no longer afford to sustain and grow this socialist erosion spreading across 35 and perhaps 36 (Hawaii) states.

    One of our astute Supreme Court Justices assessed our predicament accurately when he noted the following, over fifteen years ago:

    “Individuals who have been wronged by unlawful racial discrimination should be made whole; but under our Constitution there can be no such thing as either a creditor or a debtor race. That concept is alien to the Constitution’s focus upon the individual. …To pursue the concept of racial entitlement – even for the most admirable and benign of purposes – is to reinforce and preserve for future mischief the way of thinking that produced race slavery, race privilege and race hatred. In the eyes of government, we are just one race here. It is American.” Justice Antonin Scalia, Adarand Constructors, Inc. v. Mineta, 534 U.S. 103 (1995)

    Here is the problem:  Over 35 years ago, in 1975 Congress passed the Indian Self-Determination and Education (IDEA) Act to promote economic self-sufficiency for tribal governments. Apparently this was not working well enough, so 22 years ago, Congress added the economic steroid of a tax-free gaming monopoly for Indian tribes when it passed the Indian Gaming Regulatory Act in 1988.

    In March of this year, George Skibine, an Assistant Secretary at the Bureau of Indian Affairs (BIA) was a keynote speaker at the 2010 Citizens Equal Rights Alliance (CERA) conference in Washington, D.C. Mr. Skibine was asked: “Has the Department of Interior (DOI) or Bureau of Indian Affairs ever developed criteria or measuring systems by which a tribal government might be deemed economically self-sufficient, and no longer in need of federal funds?” The answer was no. Not in 35 years so far. Not even with a gaming monopoly. The follow-up question: Does the DOI/BIA have any interest in establishing such economic indicators so that federal subsidies could be redirected to either write down our national deficit, or redirected to the poorest tribes? The answer was no again. Why should they? The behemoth BIA bureaucracy grows as the number and needs of tribes grow.

    Also at the CERA Conference Mr. Skibine was asked if the BIA or federal government could ascertain the total annual federal funds expended for tribal governments? His response: “We tried to do that once, but were unable to.”  Astounding! No one knows the annual bottomless pit of taxpayer dollars supporting tribal governments.

    So there you have it. We are enslaved forever by our Congressmen to a burgeoning number of private tax-exempt governments that we are forced to fund unknown annual billions in perpetuity. And now we must assume the responsibility for all failed tribal government debts. This is on top of the disastrous oil spill, the failing housing and banking industry, and government takeover of health care.

    What can you do?  Try any or all these suggestions:

    1. Howl at every talking head on radio and television.
    2. Get firm commitments from incumbents or candidates to put a “sunset” or end game in place for this tax-enslavement.
    3. Get federal legislation that prohibits gaming tribes from receiving stimulus funds of any sort.
    4. Get legislation in place that ends any further “federal recognition” of wannabe tribes.
    5. Educate everyone you know by circulating this article, and getting it web-posted everywhere you can.

    We are stuck with the horrendous oil spill disaster. We are stuck with the present administration throwing more huge tax dollars out to tribes. We are stuck with the government takeover of multiple industries in this country under the present administration.

    We are not stuck with our elected officials. We can get responsible commitments from federal and state elected officials, or get them out office, beginning in November 2010. We are not helpless.

    And we best get busy. Tribal governments claim to plan for seven generations. That is a long time for Americans to be subservient custodians of our fellow U.S. citizens.  Menominee Tribal leader, Ada Deer once said, “We use the system to beat the system.”  It is time to end the abuse of the “system.”

    Elaine Willman, MPA, is the author of Going to Pieces…the dismantling of the United States of America. Ms. Willman is past Chair and current Board member of Citizens Equal Rights Alliance, an organization focused on the equal rights of tribal members who have no protections under the 14th Amendment, and serve at the mercy of private tax-exempt governments annually subsidized without inquiry or consent of American taxpayers.

    Contact Elaine Willman:  toppin@aol.com

    Just Use the “Easy” Button

    When I grow up, I want to be an editorial writer for the Honolulu Advertiser.  What a sweet gig that would be.  I’d just have to get up in the morning, come to the office, change around a few sentences in a press release from some favored organization (or on a really strenuous day, check in with the head of Hawaii’s Democratic Party for the official line), then head out for a good lunch and a refreshing siesta.

    What?  You say there’s more to it than that?

    You’re right.  Sometimes I might have to go to staff meetings.  But still . . . .what a great gig.

    Too harsh?  Well, perhaps you should consider the Advertiser’s recent editorial on the OHA suit against the state (mentioned in Wednesday’s post by the way).  Titled “Real leaders find a way to pay debts,” it is little more than a rearrangement of OHA’s press release, accompanied by the wonderfully obvious title point.  I’m sure that in response, Hawaii’s leaders are slapping themselves in the forehead and saying, “Of course!  It’s all so clear now!  Since we aspire to be real leaders, we’ll just hand over the $200 million tomorrow!  I don’t know why we didn’t think of it before!”

    It’s just so darned easy to be a left-leaning editorial writer.  The Hawaiians deserve their money.  Teachers deserve to be paid more.  The environment needs to be protected better.  The state of our health system needs to be improved.  Government housing is a scandal.  There isn’t a problem under the sun that can’t be addressed by the state treasury.  Unfortunately for the actual real leaders involved, there isn’t a money tree sitting outside the state house.  (Believe me, I’ve looked.  Something has to explain the way the rationale of the state budget process.)  And Hawaii’s taxpayers–though mellower than many–still have this weird desire to hold on to the bulk of their earnings.  So sometimes, no matter how much something is deserved, there is no easy solution.  Because that $200 million owed to the Native Hawaiians doesn’t come from some mysterious fountain of gold coins in the Governor’s office.  It comes from our paychecks.  And a lot of us have seen those paychecks take a hit lately.  So we’re hurting.  And the state is hurting.  And it makes the whole thing a lot more complicated than OHA or the Advertiser want to admit.

    This Grade Is All Business

    For the longest time, the small businesspeople of Hawaii have comforted each other with rueful laughs and their club’s secret motto: “Hawaii: Live in paradise, work in hell.”  To put it mildly, Hawaii has not traditionally had the most business-friendly reputation.  At least not for the non-Doles and non-Hiltons among us.  And while some progress is being made (including a slight awareness that it isn’t necessary to completely handcuff small businesses from their inception and the election of more business-friendly politicians), there’s still a general lack on knowledge about how the Hawaii Legislature helps and hurts small business in Hawaii.  (And don’t disregard the importance of small business on the economy.  There are more than 100,000 small businesses in Hawaii bringing in over $2-3 billion in income annually (according to the Small Business Administration).

    Enter PAYCHECKS Hawaii, a non-profit and non-partisan initiative of Smart Business Hawaii, whose unenviable job it is to rate all of Hawaii’s legislators on their business savvy.  The Paychecks ratings are based upon a combination of key votes (especially tax and fee increases); efforts to decrease or increase spending and the size of government; actions regarding employer mandates and labor bills (from worker’s comp to union issues and so on); conduct in hearings, responsiveness, and accessibility; and sponsorship/advocacy for initiatives to help the business climate.  Paychecks has just released its ratings for the most recent legislative session, and it looks like quite a few of Hawaii’s legislators need a remedial education in business and helping the economy.  Every legislator was given a grade from 1(the best) to 5(the worst).  So first the good news:

    In the Hawaii Senate, two Senators got the highest score–Fred Hemmings and Sam Slom.  (Both Republicans.  Two Democrats, however, got the next highest score of “2”–Robert Bunda and Josh Green.)

    In the House, the highest ratings went to Lynn Berbano Finnegan (R), Barbara Marumoto (R), and Kymberly Marcos Pyne (R).  Scoring the second best rating were Tom Brower (D), Corinne Ching (R), Cynthia Thielen (R), and Gene Ward (R)

    And now the bad news.  There were so many second-worst “4” scores that listing them here would make this more like a roll call of the Legislature than a blog entry.  So let’s go with a simple Hall of Shame.

    Scoring a worst score of “5” in the Senate were Gary Hooser (D) and Dwight Takamine (D).

    And the dreaded “5”s in the House went to Michael Magaoay (D), Hermina Morita (D), Blake Oshiro (D), Marcus Oshiro (D), Calvin Say (D), and Roy Takumi (D).

    Not good.  Maybe it’s time we had a few of them stay after school and write, “I will not handicap Hawaii’s economic future,” on the blackboard until it sinks in.

    Check Yourself Before You Wreck Yourself (& end up looking foolish)

    With tax day looming tomorrow, how about something that reminds us of how much we all loathe the IRS and the politics of taxation?  (Not you–IRS employee who reads this blog and could conceivably audit me.  I think you’re a fine, upstanding person, a great dancer, and have fabulous hair.  I’m talking about a completely different IRS person who would never be so cool as to be reading this.)

    For awhile now, candidates for office who have wanted to demonstrate their commitment to not taxing us into oblivion have signed the ATR (Americans for Tax Reform) Tax Pledge, the gist of which is that the candidate promises to oppose any net increase in taxes, corporate or personal.  (I know, I know.  The horror!  Why, with a philosophy like that, one might leap to the conclusion that the candidate in question wasn’t in favor of driving away business and could even want to improve the economy.  What will those crazy fiscal conservatives come up with next?)

    Well, in a move so disingenuous that I wouldn’t be surprised if their pants were actually on fire while they did this, the Democratic Congressional Campaign Committee started running an attack ad against Charles Djou (a Republican running for Congress in Hawaii’s 1st District) based on his pledge.  Of course, they couldn’t claim that Djou was opposed to higher taxes.  (Well, they could, but this would tend to undermine their efforts to not get him elected.)  So instead they twisted his anti-tax pledge into a claim that he supported tax breaks for companies moving jobs overseas.  As FactCheck.org explains, this is a complete misrepresentation of the anti-tax pledge that can only be explained by political sneakiness or crack addiction.  (Ok, I added the part about sneakiness and crack.  But FactCheck really did take the DCCC to task for the blatant misrepresentation of Djou, which, in this time of high unemployment, amounts to little more than a smear tactic.)

    So let that be a reminder of a few things:

    Don’t be swayed by outrageous claims when it comes to where the candidates stand on important economic issues.  Tax issues are almost always more complicated than can be explained in a 30 second commercial.  And falling for tactics like the DCCC tried with Djou will just teach politicians that making pledges isn’t worth the fallout.

    While we can all agree that the employees of the IRS are a lovely group of people who should each individually get to date Brad Pitt or Angelina Jolie, April 15th still stinks.