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The April 3 column illustrates how incomplete facts taken out of context can lead to erroneous conclusions (“Close tax loopholes to feed state budget,” Star-Advertiser, Island Voices). The author advocates taxing capital gains at the same rate as ordinary (earned) income, asserting that only nine states apply lower rates to capital gains. However, he neglects to mention most states that tax earned income and capital gains at the same rate utilize a flat rate, typically between 5% and 6%, that is half Hawaii’s top rate. He also claims that pending legislation would make Hawaii’s estate tax exemption the largest in the nation, failing to note it would simply put Hawaii on par with the many states that conform with the federal exemption limits. He conveniently ignores the fact that investments and estates are accumulated from income that already has been taxed.
Sound tax policy should focus on paying for essential services, not redistributing accumulated wealth.
David L. Mulliken
Diamond Head
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