Hawaii government is working to increase tourist taxes to help raise money. As Hawaii is dependant on tourism, will this really help raise the state revenue or will it help to deter tourism?
The proposal is to raise the transient accommodations tax from the current 7.25 percent to 8.25 percent on July 1, and to 9.25 percent from July 1, 2010, to June 30, 2015. That would generate an estimated $30 million the first year and $60 million annually after that.
Keep in mind that most second homes in Hawaii are owned by non-residents. The government is also proposing to raise taxes on the sale or transfer of second homes or other real estate valued at more than $2 million. That would produce an estimated $4 million a year. So even as non-residents pack up and leave the State of Hawaii they get an extra whami!
During the Senate debate, GOP Sen. Fred Hemmings of Lanikai-Waimanalo said the tax increases were being pursued "for one special interest group" - government employee unions - so they can "walk away from the state crisis without contributing a thing."
In the House, Rep. Barbara Marumoto, R-Kalani Valley-Diamond Head, said Democrats think increasing the tourist tax carries no repercussions.
"Politicians think they can get away with it because visitors don't vote," she said. "But they do, not at the ballot box but with their pocketbooks."
But Rep. Joey Manahan, D-Kalihi-Kapalama, said a $1 increase per $100 in accommodation costs will not stop tourists from visiting the islands.
"I don't think that's going to deter anybody," he said.
What do you think?
source: http://www.forbes.com/feeds/ap/2009/04/23/ap6330008.html
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