Road Paved for Raising the GET?

flickr: Monochrome

Let's do a little math.

Hawaii's general excise tax of 4 percent (4.166 percent, to be exact) brought in $2.3 billion in 2009 on a total tax base of $75 billion.

If the GET had instead been, say 5 percent that year, the state's take would have been, very roughly (the GTE rate varies depending on the industry), another $500 million or so.

Hawaii's budget deficit this fiscal year and the two that follows is $844 million.

Put another way, if the GET were raised for the next two consecutive fiscal years, the state would not only be able to pay for existing operations, it would be in the black.

Now, let's do a little reality check: The GET is probably — probably — not going to be increased this year.

With the exception of Oahu's half-percentage-point tax to help fund Oahu's rail system (it sunsets in 2022), the GET hasn't been increased since 1965, when it was 3.5 percent. Neil Abercrombie was still a hippie college student in Manoa.

But, if Hawaii lawmakers want to resolve the state's financial problems relatively quickly, there is no greater single revenue vehicle than the GET, which accounted for 66.3 percent of the state's tax collections in 2009.

While a GET hike is not currently being proposed (more on that later), it hasn't been ruled out, either, and is increasingly being whispered about in Capitol corridors (and in the case of labor unions facing a new round of collective bargaining, sometimes shouted).

The more unpopular the current proposals to raise revenue and save money become — e.g., ending Medicare Part B reimbursements, taxing pensions, raising taxes on liquor, stopping state tax deductions, cutting social-service programs — the more attractive a GET hike becomes.

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