Developers And Tax Lunacy

Bob Jones
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Wednesday - November 30, 2005
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You’ll be seeing letters to the editors from “average citizens” hailing the wisdom of condos and retail shops in Kakaako makai and house development in Waimea Valley on Oahu’s North Shore.

I went through those letter/phone call campaigns for 43 years as a local journalist. Developers hire PR firms to get sympathetic firms to start a “Joe citizen” letter campaign.

Ask lobbyist John Radcliffe about his alleged “grassroots” campaign on car insurance and pay-at-the-pump legislation. Or either side lobbying on the Akaka Bill.

Here’s the reality.


Five members of the City Council are going along with returning 1,300 acres of Waimea Valley to owners who want to build houses there. The council and the mayor seem disinclined to find ways to condemn and preserve this unique North Shore ahupua’a.

In town, meanwhile, city planner Lowell Chun, the HCDA, Alexander & Baldwin, Kamehameha Schools and General Growth Properties are salivating over condos and shops at our Kakaako water-front.

Great vision be damned. Show them the money.

I find it hard to accept the Federal Tax Reform Advisory Panel recommendations just as Congress has killed the proposal to restore the income tax on millionaires to 39.5 percent.

And why should I agree to a 15 percent tax credit rather than a deduction for my home mortgage? You know damn well that smart accountants will find ways for two-home owners to claim 30 percent by showing both are necessary primary residences. Renters, a big category in Hawaii, will continue to get zip.

Our income tax brackets would stay exactly the same.


Deductions are baloney. My wife and I get a tax break each year through an employee medical-flex-pay plan that many of you do not. My good friend has accumulated $5 million net worth in real estate, his wife makes $500,000 a year and they pay negligible tax. When they do get hit, they ask for an extension (automatic), default on that, and make a compromise deal with the IRS to pay only a negotiated piece of the bill plus interest. They invest the money they’ve owed but not paid and then deduct the penalty interest from next year’s taxes.

Why do we get to deduct state income taxes and property taxes? Why is taxation on a local level considered an “expense” for the purpose of what Uncle Sam needs to run the country? Makes no sense. If you can get an interest deduction on home equity loans (but not credit card, car or personal loans) why is that capped at $100,000? A loan is a loan.

What’s all this tax-reform garbage really yield?

The very rich and biggest corporations will find ways not to pay. You and I and small businesses will not.

We do need more tax revenue as services ding us. Tax Foundation director Lowell Kalapa is a dreary background hum with his mantra that “if Hawaii is to build a solid economic foundation for the future, community leaders in business, labor and government must begin to shape an attractive business climate, and it starts with the bottom line of taxes.”

Only your sycophant, dues-paying biz members are listening, Lowell.

We need taxes, often more taxes. Fact. Personal taxes and business taxes.

Flat, progressive taxes that eliminate deductions, reduce the tax rate proportionately by income level and leave no loopholes for corporations or the very wealthy.

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