On Politics: GOP leaders laud gov on food, drug tax idea

Talking issues, not promises, Hawaii’s new Gov. Josh Green spent much of his successful campaign extolling the Republican issue of cutting taxes.

Green campaigned against Hawaii’s tax on food and medicine.

Oddly enough, this is such a GOP principle, it is one of the first issues mentioned in the Hawaii GOP platform.

“The state must aggressively reform and measurably reduce current taxes and fees. Specifically: Remove the Excise Tax from basic necessities: food, medicine and medical care,” the platform says.

The Hawaii Democratic platform is fairly mushy about taxes, saying it wanted a tax policy: “Helping businesses to thrive, including tax policy that lessens the tax burden of low- and middle-income earners and increases the tax burden of high-income earners and the wealthy.”

In his inaugural address, Democrat Green was clear and direct.

“The tax on food and medicine is very regressive, it hurts the poor the most. If we are going to be progressive, we should suspend that tax, this is the time to do it,” he said.

Former GOP Hawaii Congresswoman Patricia Saiki and former GOP leader and Democratic candidate for governor, D.G. “Andy” Anderson, emailed me to shout their praise of Green’s position.

“Took a while to convince these Democrats to accept, but new batch of D’s understands impact on the masses a bit better,” wrote Anderson, with Saiki adding, “I couldn’t believe that the new Governor Green — or any Democrat would finally see what you and Republican leaders have been proposing for YEARS.”

University of Hawaii’s James Mak, emeritus professor of economics, in a recent essay pointed to former Tax Director Isaac Choy’s defense of the tax, noting that “Exempting food purchases would primarily benefit higher income households and affluent tourists and would not produce a more equitable tax system. It would also cost the State nearly $270 million in lost tax revenue. Choy also explained that Hawaii does not currently tax prescription medicine.”

Hawaii’s new lieutenant governor, Sylvia Luke, who just wrapped a decade serving as the state House finance committee chairwoman, advised that Hawaii needs to not just look at taxes; the debate should be on lowering the cost of living and, of course, cutting taxes is part of the question.

“The Legislature has discussed food and medicine taxes for some time,” Luke said in an interview.

“It has not passed for a variety of reasons,” she said.

“Clearly this is something the governor wants to pursue and he will want to talk to the Legislature about it.”

Luke framed the issue as something larger than just a tax cut.

“I think there is a big cost of living issue, it is not just the cost of food. It is the cost of child care, it is the cost of rent, it’s the cost of transportation,” said Luke, a 23-year legislative veteran.

“The executive comes in with a plan but it takes all branches,” Luke said. “Executives can’t just make rules, you have to work with all government branches. Ultimately it is the Legislature that passes the law.”

Luke has helped balance enough budgets to know tax cuts cost money; this one will mean $270 million will be needed and easy tax cuts quickly become difficult budget decisions.

For the new team running the state, it is always valuable to balance enthusiasm with experience.

Richard Borreca writes on politics on Sundays. Reach him at 808onpolitics@gmail.com.