Warning: The Real Cost Of The General Excise Tax05/18/2010
Hawaii consumers — and tourists alike — pay a tax that's often thought of as similar to a sales tax.
The 4.0 percent General Excise Tax is often tacked onto receipts just like a sales tax. But the power — and bite — of the tax goes much deeper. It touches the price of goods and services every step of the way to the consumer. That means that while it may appear to be just like a 4.0 percent sales tax, the cumulative total impact of the tax by the time a product or service hits the consumer is much higher.
The GET is "the envy of all states," Rep. Marcus Oshiro, chair of the House Finance Committee, told Civil Beat. He pointed out that it's broad based, easy to administer, equally applied to goods and services, and generates a lot of revenue with a relatively low rate.
"It's a privilege of doing business" in Hawaii, Oshiro said.
But critics point out that unlike with sales taxes, where exceptions are made to avoid placing a burden on the poor for the necessities of life, the GET touches almost everything. Along with shipping, they say, it contributes to what is known as the Price of Paradise, the high cost of living in Hawaii.