Economics of Taxation

Taxing Tourists to Generate Revenue to Address the Negative Impacts of Climate Change on Hawai‘i Natural Resources April 5, 2024 There is widespread agreement among Hawai‘i residents that the state government needs to spend more money on natural resource stewardship. A critical question is how best to pay for it. In his January 2024 State of the State Address, Governor Josh Green said that “we must do more to protect our beaches, parks, and other… Read More
Are Businesses Heavily Taxed in Hawai’i? July 6, 2023 By James Mak A recent report—Total State and Local Business Taxes—published by Ernst & Young LLP, State Tax Research Institute, and Council on State Taxation presents detailed state-by-state estimates of state and local taxes paid by businesses in Fiscal Year 2021. The report (hereafter referred to as the Ernst & Young report) is in its… Read More
A Comparison of State-Level Carbon Reduction Strategies: A Case Study of Hawai‘i March 16, 2023 Abstract: State-level electricity standards are proliferating and becoming more ambitious, with numerous US states adopting a Renewable Portfolio Standard (RPS) and a small but increasing number of states participating in carbon pricing programs. The State of Hawai‘i has an ambitious RPS that requires 100% electricity generation through renewable sources by 2045. This study uses a… Read More
Cliffs in the GAP: A Design Flaw with an Easy Fix February 10, 2023 By Dylan Moore How much more am I getting? I’m getting $80 a month before taxes, and I’m going to lose a $1000 benefit… It’s so stupid. This quote—from a parent in California1—describes the frustrations that policy “cliffs” can cause for low-income working families. A “cliff” occurs when a large benefit is suddenly withdrawn when… Read More
Mauna Loa Eruption by Tokiko Bazzell Time for A Carbon Tax for Hawaii? January 11, 2023 By James Mak and Erik Haites Hawaii’s constitution requires a Tax Review Commission (TRC) be appointed every five years to review the state’s tax/revenue system. Commissioners comprise of tax experts in the state and serve without compensation. In its final report to the Legislature, the 2020-2022 Tax Review Commission’s top recommendation is a carbon tax… Read More
UHERO’s Justin Tyndall’s “case for taxing large vehicles” receives national media attention December 8, 2022 UHERO’s Justin Tyndall's recent publication in Economics of Transportation has received national media coverage, including Medium, Streetsblog, Financial Times, and Vox. Using data covering fatal vehicle collisions in the US and exploiting heterogeneity in changing vehicle fleets across metros for identification, Tyndall estimates that replacing the growth in Sport Utility Vehicles with cars would have… Read More
Rethinking HTA’s “Regenerative Tourism Fee” November 14, 2022 By James Mak and Robert D. Ebel Hawaii Tourism Authority’s (HTA) Oahu Destination Management Action Plan (DMAP) proposes to “Establish a ‘Regenerative Tourism Fee’ (RTF) that directly supports programs to regenerate Hawaii’s resources, protect natural resources, and address unfunded conservation liabilities.”  The proposed RTF is more commonly referred to as a “visitor green fee.”  The… Read More
To Tax or Not to Tax Sale of Food and Medicine August 15, 2022 By James Mak Inflation is soaring at the highest rate since the early 1980s.  Not surprisingly, many Hawaii residents are struggling financially today. Sadly, this has been true long before the pandemic and the recent spike in prices.  In 2018,  42% of Hawaii households struggled to make ends meet; 33% were ALICE households, households that… Read More
Economic and GHG impacts of a US state-level carbon tax: the case of Hawai’i April 19, 2022 A new paper by a team from UHERO published in Climate Policy finds that a carbon tax for Hawai‘i set at the federal social cost of carbon would reduce cumulative GHG emissions by 10% relative to the baseline from 2025 to 2045. They find that when carbon tax revenues are paid as equal-share dividends to Hawai‘i… Read More
Waikiki by Micahel Olsen/Unsplash Funding the Hawaii Tourism Authority: TAT vs General Fund…Or? June 28, 2021 By James Mak A majority of the states in the U.S. have a government tourism office (also known as Destination Marketing Organization, DMO) that markets their state. The National Council of State Legislatures (NCSL) notes that the most common way for states to fund their tourism offices is by appropriation from their general fund. [1]… Read More
Solar farm in Waianae Is a Carbon Tax Viable for a Small Island Economy? June 17, 2021 By Maja Schjervheim, Paul Bernstein, Sumner La Croix, Makena Coffman, and Sherilyn Hayashida For the third year in a row, a carbon tax bill fizzled out at the Hawaiʻi State Legislature. Perhaps it was the difficult timing of introducing a new tax in the wake of a pandemic. Perhaps it was due to qualms regarding… Read More
Waikiki Beach Should the Counties Get a Share of the Transient Accommodation Tax? June 16, 2021 By James Mak In the recently-concluded thirty-first legislature (2021), Hawaii state lawmakers passed HB 862 CD1 which would divert to the state government’s general fund (GF) $103 million from the state’s transient accommodation tax collections (TAT) that otherwise would have gone to the counties. In exchange, state lawmakers gave each of the four counties the… Read More
Kawaikui Beach Taxing Income in the New World of Teleworking May 28, 2021 By Robert D. Ebel and James Mak Covid-19 has accelerated the growth of teleworking/telecommuting in the U.S. As a result, states are having to confront the challenge of determining how best to tax the incomes of employees who live in one state but work remotely for employers located in another state. In Hawaii a resident… Read More
UH West Oahu ACM Understanding the Role of the Hawaii Film/TV/Digital Production Tax Credit In Diversifying the Hawaii Economy March 15, 2021 By Sumner La Croix and James Mak Blog: The Hawaii Film Tax Credit: An Update Hawaii is one of 32 states in 2020 to offer a tax credit to film, TV, and digital productions through the Hawaii Motion Picture, Digital Media and Film Production Tax Credit (hereafter “film credit”). Since the passage of the film… Read More
Screenshot of tax credit for research activities form The Hawaii Research Activity Tax Credit: Is It Effective and How Can It Be Improved? January 4, 2021 In 2013, the Hawaii State Legislature enacted a tax credit for Hawaii technology firms engaged in qualified research activities satisfying requirements for the federal research tax credit. After reviewing studies in the economics literature on the effectiveness of research tax credits in other states and countries, we conclude that a research tax credit can be… Read More