GOP: FOOD TAX CREDIT A NICKEL A DAY--OR LESS

House Republicans said today a proposed food tax credit by the democrats is too little to be seriously considered meaningful tax relief. SB 751 SD1 HD2 proposes a food tax credit and is currently in conference committee. Under the provisions of the SB 751 SD1 HD2, a taxpayer making between $20,000 and $30,000--poverty level wages for a family of four-- would only be eligible for a $20 tax credit. That $20 amounts to 5 cents a day. That's better, however, than Hawaii residents making $30,000 or more. They wouldn't be eligible for any relief at all.

"It's a real challenge to call five cents a day tax relief," said Rep. Jim Rath (R-Kona). "This amounts to crumbs when the state is holding the whole pie."

House Republicans believe this proposed tax credit doesn't provide nearly enough relief for the overtaxed people of Hawaii and takes the wrong approach. Instead of instituting a cumbersome tax credit that will only apply to part of the population, the State should repeal the General Excise Tax on food as proposed by the Republican Caucus.

Republicans said Democrats are under pressure from the last campaign when many Republicans campaigned under the promise to introduce legislation to eliminate the 4% excise tax on food.

"The original house bill by the Democrats died in the Senate, so they amended a Senate bill to add the food tax credit," said Rath. "They are desperate to show some tax relief, but this just doesn't cut it."

The maximum amount of tax credit that a Hawaii taxpayer could receive would be $70, and that would only apply to people filing tax returns with an adjusted gross income under $4,000.

Repealing the excise tax on food would give back an average of $110 per person--$440 for a family of four. People would receive this without having to file a tax form to ask the State to give them back money that should never have been taken from them in the first place. While a tax credit forces taxpayers to wait a whole year before they receive anything, repealing the excise tax on food would save people money every time they go to the grocery store--putting that money back into circulation right away.

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