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The Honolulu Advertiser
Posted on: Wednesday, January 4, 2006

Let's think through city tax relief plans

It never rains, but it pours.

After weeks of hearing complaints about the skyrocketing property assessments from voters fearing a mammoth city tax increase, elected officials are tripping over each other to be first in line with a tax-cutting plan.

On Thursday, City Council leadership announced a package of tax-relief bills that would increase maximum income qualifying for a tax credit, allow homeowners to avoid large tax increases if they don't sell their home over a 10-year period, and provide a one-time credit to those who meet a federal income level.

Two days later, Mayor Mufi Hannemann seized his opportunity to announce a proposed $40 million tax cut, which would translate into about $300 per owner-occupant.

Finally, council member Charles Djou wants to propose a "Proposition 13" type of overhaul similar to the famous — some would say infamous — initiative that siphoned tax revenue away from California schools.

This result is predictable: In the panic to respond to taxpayer fury, politicians feel pressed to whip up some kind of appeasement.

What's needed, rather than a quick fix, is rational tax reform that assesses what bills the city must pay and then sets the revenue-producing tax engine at a level that can sustain needed services without draining taxpayer bank accounts.

More of the burden should be borne by those who profit off rising land values — those buying and selling as speculative investments — than by homeowners who simply are keeping the roof over their heads.

While it's certainly reassuring to see City Hall paying attention, the job at this juncture is to avoid bankrupting the private sector while making ends meet in the public.