Take it from this CPA, tax fractions make sense
A retired CPA, I am responding to a recent letter to the editor in which the author criticized a tax rate of 4.4386 percent, arguing that the fraction divides pennies to ten-thousandths, asking, “Why do they come up with (such) number(s)?”
Please don’t blame Mayor Harry Kim or anyone else for the realities of mathematics. Hawaii imposes excise tax, not sales tax. Merchants (such as restaurants) are allowed to pass the tax along to the consumer. To maintain fairness, even at the old 4 percent rate, merchants would add $4.17 to $100 tabs (an add-on rate of 4.166666…, rounded to 4.17 percent).
Upon filing the restaurant’s excise tax return, the gross amount collected ($104.17) would be reported. That figure, multiplied by 4 percent (the GET rate) results in $4.1668, which is rounded to $4.17. Accordingly, taxing authorities received the exact amount that the consumer paid to the merchant.
Here’s the math. To determine the effective sales tax rate at an excise rate of 4.25 percent, take $95.75 (the net of a $100 sale, minus GET) and divide it into 100. The result reveals an effective sales tax add-on rate of 4.438642 percent. Do the same math using a GET rate of 4.5 percent, and you will discover the effective sales tax add-on rate to be 4.7120419 percent. I’m sorry about the length of the fractions, but even 4 percent GET yields a sales tax rate of 4.166666… to infinity. This doesn’t bother me any more than Pi equals 3.141592… without ending.
Finally, this tax rate issue has absolutely nothing to do with the potential elimination of the penny. There is no difference to mathematical realities, whether performing calculations in Canada, Australia or elsewhere. Mathematicians often joke that someone declared, “There are three types of people in this world: those who can do math, and those who can’t.”
James M. Donovan
Questions for Puna Geothermal overseers
After reading the Tribune-Herald this morning, I am writing to inquire when the public hearings start for Puna Geothermal Venture wanting to re-open on the Big Island?
In 2014 PGV’s permit to pollute Lower Puna expired without approval. In 2015 the residents requested and were promised a contested case hearing on the matter.
The Clean Air Branch did absolutely nothing toward the contested case until 2018 and the lava erupted, whereby the hearings officer cancelled it.
So, now we are here in 2019, PGV’s enhanced fracking by forced reinjection for the last 30 years has blown out the side of the island by eroding the rift zone under Leilani Estates and Lanipuna Gardens, yet for some reason PGV thinks the state and county are just going to sit back as usual and let them operate as nothing happened.
The residents in Lower Puna would like to know the state’s intentions now, and when the public hearings will start, so unless you will be doing your job of protecting the environment and the people and not give PGV permission to pollute us anymore, I would like a date for the public hearings to start now before any more time goes by.