Gubernatorial candidates promise relief from state’s general excise tax on food, medicine
Written by ABC Audio ALL RIGHTS RESERVED on July 23, 2022
HONOLULU (HawaiiNewsNow) – This year’s governor’s race could lead to one of the biggest consumer tax cuts in recent Hawaii history.
As people continue to feel the pinch with rising prices, candidates are promising relief from the state’s general excise tax (GET).
All three major candidates in the democratic race for governor — Businesswoman Vicky Cayetano, Lt. Gov. Josh Green and U.S. Rep. Kai Kahele support lifting the excise tax on food and medicine.
Hawaii Appleseed Center for Law and Economic Justice is focused on helping struggling families and communities.
The Hawaii Budget and Policy Center Director Will White said they’re supportive of progressive tax policy but views the GET as a regressive tax.
“Folks who are of the lowest income are paying a higher percentage of their monthly income on that tax relative to higher income earners,” White explained.
Former Tax Director Kurt Kawafuchi said businesses can pass the GET to customers.
“If you take a store like Ross, and you go and buy something for $100, Ross is not only charging you the general excise tax on the $100, but it also is paying the 4.5% on many of its transactions to operate,” Kawafuchi explained. “For example, when it pays rent to the landlord, generally that’s going to include the 4.5% general excise tax.”
Kawafuchi said there’s already an exemption for prescription drugs.
But if a proposal were to be enacted, Appleseed Hawaii suggests a revenue raiser be paired with the tax cut.
“Because the last thing you want to have happen is provide direct relief for low-income folks,” said White. “But then in the state budget, have to slash services for folks who need those essential services the most, in our state.”
The organization suggested raising the capital gains tax or increasing tax on the wealthiest earners in the state.
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