“A surcharge on investment real property” or a “luxury tax on luxury properties of absent owners,” call it what you will, but it’s outrageous that the super-rich get to exploit Hawaii to further enrich themselves at the expense of the broader society.
While they claim to contribute to the economy, those contributions are minuscule compared to the damage done to the full-time residents through the gentrification of our neighborhoods and the resulting affordable housing crises and homelessness problem those contributions leave behind them.
Our mayor and entire County Council had a chance to do something when County Councilwomen Jen Ruggles proposed this surcharge or luxury tax over a half year ago. But they chose to ignore it and voted to increase the general excise tax (GET) on all of us for two years with no plan for what happens after that.
Now it appears that they did not understand the parameters of the GET increase as set forth by the state Legislature for use of its revenues and now want to debate how the funds are to be used. It also appears that they don’t communicate with our state representatives on the Legislature on these matters.
Now, Harry Kim says “a surcharge on residential investments properties would obviously limit county options and make it even more difficult to balance our budgets” … “therefore we have to jealously guard this taxing authority, and ask that you not break this bright line of separation.”
This sounds ridiculous to me, coming from a mayor and County Council who ignored this potential revenue stream that would not have negatively affected full-time residents in favor of raising the GET — a tax that affects the poorest the most. Tim Richards even suggested closing down the bus system until they could get it straightened out as a way to balance the budget. Obviously, he’s out of touch with the lives of everyday people who commute from places like Hilo, Naalehu, Pahala, Kapaau etc. and can’t afford their own transportation.
Of course, I’d vote yes for a dedicated source of funding from investment properties for public education. Especially at a time when Betsy DeVos is diverting as much federal money away from public education as she can. Hawaii Public Schools need our support.
As for our own County Council utilizing this potential income source for our own county, they certainly haven’t shown any inclination toward it in the past. I had a conversation with a man who said he had a friend who had an investment property at which he stayed one or two weeks a year and complained that he paid $45,000 in property taxes on it. That is a lot of money to me, so I asked what the property value was. He replied $6 million. Suddenly, the $45,000 seemed like peanuts. It’s reported that Hawaii has the lowest property taxes in the nation — and given this example, it’s easy to see the reality.
Real property tax for full-time residents needs to be kept low in relation to its value because property values are extremely high in Hawaii because of speculation and real estate investments for profit which displaces local families.
However, it should not be kept low for people and corporations exploiting the environment for profit.
Leslie Iijima is a resident of Waikoloa.