LEGISLATOR PROFILE New Legislator Extends Hand To Small Business By Malia Zimmerman Newly elected state Representative Michael Magaoay (D-North Shore) is one of four crusaders in the Legislature who have agreed to head the Small Business Legislative Caucus. He, along with three other lawmakers, Rep. Colleen Meyer (R-Hauula), Sen. Norman Sakamoto (D-Moanalua) and Sen. Sam Slom (R-Hawaii Kai) made a commitment to help business this legislative session by introducing and supporting legislation to improve Hawaii's business climate, while battling legislation damaging to business. The other co-chairs of the caucus, who through their commitment to the caucus unite two parties and two houses, have served on the committee in prior years and are business owners. Magaoay is not a small business owner, he is an electrician and a senior project engineer for a local construction company. However, he says he joined the leadership of the Legislature's Small Business Caucus because he sees the importance of a vibrant business community. "I come from the North Shore where plantations have been shut down and people are trying to do the best they can without their jobs in agriculture. They want to pay their bills, send their kids to school and put food on the table, and don't have time to pay attention to what is going on at the Legislature. Working at the Legislature and with the other caucus members allows me to find ways to help them." Magaoay, unlike many of the leaders in his party, does not claim the economy has turned around. He says although there is some signs of improvement, the state must continue to work on ways to help the economy and business thrive and stabilize. In addition, the state must diversify so it is not so dependent on a handful of industries. "It is too premature to say the economy is turning around. There are some signs of improvement, but anything can change that a strike, a decrease in tourism, something bad could happen locally like that 81-year-old tourist being killed. Who knows how that will affect tourism?" Magaoay says. How do these legislators know what the "hot issues" are for the majority business owners in this state? The team polled the remaining 72 legislators and requested input from all of them as well as outside business, professional and trade associations. As a result of the feedback, the Caucus will focus on legislation to: * reduce the personal and corporate tax burden on Hawaii's taxpayers, match state and IRS deductions, and accelerate the elimination of the GE tax pyramiding; * authorize privatization as an option * pass positive civil service and collective bargaining changes * complete workers compensation reform while ending "stress" claims * advocate meaningful tort reform * improve Hawaii's public education * enact an independent contractor statute * amend Hawaii's prepaid health law Other bills outside of the caucus package that will also be supported and tracked. Magaoay and the other legislators encourage ALL business owners and leaders to come to the legislature this session to testify on these issues. "The testimony and support of small business owners, whether through letter or personal testimony, is important in helping us pass legislation that helps them," Magaoay says.
 Government and Domestic Violence By Richard O. Rowland, Rowland & Associates Another tragedy, another restraining order fiasco. This time the police ineptly unable to serve the papers. Not that it would have done any good. Cherry Ann Cachola Domingo was gunned down in her car by "boyfriend" Michell Udani, father of their child, on January 13 at Ala Moana Center. The Domestic Violence Clearinghouse Executive Director, Nancy Kreidman, is quoted in the Honolulu Advertiser (1/16/01) "Domestic violence programs here on Oahu and statewide continue to encourage victims to get restraining orders because they are so effective as an instrument of the system to deliver a message to the abuser". Perhaps Cherry Ann should have had the presence of mind to hold up a copy of the restraining order toward Udani's shotgun, thereby warding off the blasts. Don't be silly, you say? Well, it is also pretty silly to say that a restraining order will stop a criminal. The only thing that will stop a criminal is a gun. That's why the police are armed. If Cherry Ann had had a handgun in her purse and known how to use it, both of them might still be alive. He because he might have fled, she because her handgun would be the great equalizer and would render him dead if he persisted. And in that case, dead he should be. The police don't want the Cherry Ann's of this world to be armed. They would rather have shootouts in the Ala Moana Shopping Center. "They can't be everywhere," they say, "so don't plan on us protecting you." Should we ask who, then, is to protect a helpless woman from a stalker. A restraining order? Get real. The Domestic Violence Clearinghouse sounds to me like an apologist for an arrogant government which cares not about protecting citizens, only about protecting government. Let's train and arm our Cherry Ann's and watch domestic violence decrease dramatically. And, as a bonus, your government would get more polite and considerate.
By Malia Zimmerman It was interesting spending the day with Steve Forbes, president and chief executive officer of Forbes Magazine, who came to Hawaii specifically to talk with 300 business owners and politicians at the Small Business Hawaii's 25th Annual Conference. First, he's surprisingly quiet - pulling out information or advice from this media giant is not easy - that is until he is formally given the floor and a microphone. Second, he listens intently to those around him, appreciates them thoroughly, and remarkably retains and instantly computes an amazing amount of complex information. Though he is quiet, his eyes sparkle intently and take in his surroundings in a rather refreshing way. In just a day, I came to know a man who is extremely kind and respectful, a father of 5 girls, a businessman who is intensely non-political but passionate about politics, and a master of business and economics. Personally, Mr. Forbes impressed me with time he took to talk to everyone who approached him. That included dozens of fans that wanted his autograph or signature on his book, numerous staff at the state Capitol, and a busload of tourists from South America who raced up to him hoping for a picture by his side, shouting "That is he!" Professionally, I was amazed at his vast knowledge of Hawaii, its economics and politics and its success stories and downfalls. His talk focused on Hawaii's vast potential: "The economic potential for Hawaii is enormous - with a fantastic climate, friendly people, and the high tech era. And Hawaii almost looks cheap compared to Silicon Valley. Hawaii should be a magnet for attracting business globally." He highlighted specific reasons Hawaii has been in economic stagnation for the last decade, and what can be done to spark growth and create a vibrant economy. (I am convinced we should hire him to be governor for a year and fix Hawaii economically- not that he'd want the job). And there was praise for Hawaii's government (Yes Benjamin J., you too) for recently enacting some tax cuts and offering incentives to high tech companies. However, he stressed Hawaii has a long way to go before it shakes its reputation nationally of being the "people's republic of Hawaii." A 1997 editorial in Forbes magazine titled the "People's Republic of Hawaii," much like a May 25, 2000 editorial in the Wall Street Journal titled "Hawaii's Gray Politics," ruffled a good many powerful feathers when it aired Hawaii's political and economic troubles for the rest of the world to see. "I guess I'm not welcome at the governor's mansion," Forbes says, as he joked with the crowd. He stressed most of Hawaii's economic problems stem from predictable sources. "Hawaii has an anti business climate, one-party politics, and focuses on punishing its critics than promoting economic growth. It is a centralized state with powerful unions and the result is all too predictableñeconomic stagnation. Many of the wounds have been self-inflicted and have left Hawaii treading water economically for the last decade while the rest of nation was booming." Not the kind of talk that will have him welcomed by Hawaii's public union leaders or the powerful Democratic insiders. But that didn't stop him from reviewing Hawaii's taxation problems imposed on all who grace Hawaii's shores. "Taxes are not a means of raising revenue. They are a price and a burden and penalize those who take risks," Mr. Forbes says. He says the general excise tax is a "tax on a tax" and the reduction of "pyramid taxes" or 4 percent tax on wholesale services, should be rapidly be promoted rather than over a period of seven years, and should apply to all businesses rather than a select few. "Make it easier for people to do business here and in the long term Hawaii will increase business exponential." Following the war cry of small business advocacy groups, Mr. Forbes says "abolish now and forever" the 0.5 percent tax that goes to the State Department of Labor Training Fund, saying it is an unnecessary tax, an intolerable burden and hurts employment. Those comments brought on wild applause from the audience. The applause turned to laughter and sighs when he said "at least in Hawaii you haven't found a way to tax the sunshine yet." Hawaii is nationally renown for its employer mandates including workers comp and of course, health care. Hawaii is one of a handful of states remaining with a presumption clause that burdens employers with unreasonable workers comp mandates, including the assumption that any injury an employee gets is automatically blamed on the employer, unless the employer can prove otherwise. "These huge costs can hurt the very people you are supposed to help." The patient has to be put in charge of health care again, civil service reform has to be implemented, and quality education must be brought to the state public school system. And most importantly, politics truly has to be out of the way. "The political environment in Hawaii has to change. It is one thing to have a system or perceived system that tells businesses to play ball to get on the gravy train. But it is not ok to squash decent businesses because they won't. That sends absolutely the wrong message to potential prospects outside Hawaii. Much more has to be done on this end, or any other changes will be a dead cat bounce." Cat lovers weren't happy about the dead cat bounce comment, but everyone appreciated Mr. Forbes and his candid advice. He received a standing ovation.
Getting Tax Information By Marie Okamura, State Tax Director I'm sure that you have at one time or another had a tax question you needed an answer to with all the uncertainty that brings. Who should I ask? Is the answer correct? Could it be correct in one situation but not in a slightly different situation? What if I am questioned about the answer in the future? Answers to many tax questions are found in our publications, most of which are posted on our website at www.state.hi.us/tax. These include our administrative rules, brochures, Tax Facts publications, Tax Information Releases, Department of Taxation Announcements, and more. Other tax questions may be about a specific situation that is not addressed in our publications. In this case, you could call us to get a verbal answer, or you could write a letter or e-mail us to obtain a written answer. In making this decision, take the following into consideration. The nature of taxes is such that the correctness of an answer depends on the exact set of facts and circumstances presented. For example, if you ask us what general excise tax rate you should pay if you sell equipment, our answer would be, "it depends." The correct rate may be the wholesale rate of 0.5%, the phased--in pyramiding relief rate (3.0% in 2001), the retail rate of 4%, or even 0% if the sale qualifies for an exemption; it just depends on the exact fact pattern. If you decide to call for a verbal answer, neither the facts presented nor the answer received is documented. As a result, you may not rely upon that oral advice should a question about that issue arise in the future. If you write or e-mail us with a specific question, you can rely on the written response that is sent to you as long as you provided complete and accurate information to us along with supporting documents when necessary. You cannot, however, rely on a written response to another taxpayer's question because the type of taxpayer, the nature of the taxpayer's business, and other factors may not only alter the fact pattern but the answer as well. Over time, a previously issued written determination may become invalid due to a change in the tax law, administrative rules, or official Department position. To keep on top of these changes, track the new postings on our website. You can even register for automatic e-mail notification whenever our "What's New @ Tax" page is changed. For a listing of our addresses, telephone numbers, e-mail addresses, and more, look at our newly revised "Hawaii Tax Information at a Glance" publication which can be obtained from any district tax office, by calling our request line at 587-7572 (toll-free at 1-800-222-7572), or on our website.
  
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