Small Business News

Small Business Hawaii | Volume 26 Number 1 | January 2001

Money is a Tool | 7% Solution
Thomas Square | Small Biz Voice | State Tax Tips



Money is a Tool
By Richard O. Rowland

Envy is a powerful, natural force. If it is left unchecked by some other force it is capable of destroying society. Hence the Tenth Commandment. But it is not just money that inspires envy. How about strength, beauty, ability, intelligence, taste, etc.? The urge to envy in each of us causes us to irrationally want to "level the playing field." For example, say you are a kid who loves to play basketball and you are only 5'2" tall. Damn that kid from across town who's 6'1", he has an unfair advantage over you. Why not cut 11" off his legs? Then life would be "fair." But he is jealous of you because you have an IQ of 131, get good grades and excel in math. He wants the same but his IQ is 110 and he is talented in fixing things, not academics. He wants to have a surgeon do a frontal lobotomy on you. That would set things right. Left to envy, all women would look like Janet Reno or Eleanor Roosevelt and all men would act like Al Gore and look like Casper Milquetoast.

I say, hooray for differences. Why would anyone want all to be the same? All to live in the same style house, drive the same type of car (decidedly not an SUV), get the same pay, each to have three kids (one boy, one girl, one combo), etc.?

Why? All these differences are tools. Each of us must have different tools with which to engage life's problems and opportunities.

But what about money? Money is also a tool. It can build; it can destroy. It can produce jobs, new products and overall cooperation in society. Or, it can produce war, death, pestilence and disease, especially when it is controlled by a government. Some like to say things like "Bill Gates has too much money" (meaning they want some of it.) But money is a tool and if Bill Gates has garnered it by making customers happy, how can he have too much? Would you say that a construction company has too many hammers or dump trucks? That Einstein's IQ was too high? That a baseball player's hand/eye coordination is too good? Would it be bad if we had 10 more Bill Gates? Or 100 of his clone? Would we all be better off? Or would we be better off if we destroyed all his wealth and did without it and all it has produced?

That's why envy and jealousy are sinful. The Tenth Commandment is wise advice on the use of life's tools.

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The 7% Solution

By Ken Schoolland

There are strange things in the news-and I'm not referring to the elections. The U.S. Department of Agriculture has announced that it will be paying sugar beet farmers to destroy 7% of their crops. These farmers will plow under 102,000 acres of sugar beets and they will be paid with sugar that the Department of Agriculture bought and stored in previous years in order to keep food off the market and to raise prices.

What's the reason for destroying this perfectly good food? They call it "a federal program intended to reduce a price-depressing glut." (Honolulu Advertiser, 12-9-00, p. B-8) Is there anything more absurd than destroying food?

As consumers shop around for low food prices this holiday season, they may have a different view of any so-called "price-depressing glut." To consumers, low prices are a good thing. Saving money makes it possible to buy more things. Only government bureaucrats have contempt for low prices and savings.

Isn't this an irony. We have one quasi-governmental agency, the Federal Reserve Board, which is trying to fight inflation while another agency of government is paying farmers to destroy crops in order to boost inflation. Indeed, the government is like a disease masquerading as its own cure.

If it is so good to destroy crops to raise prices, then the government should be delighted when a hurricane strikes. A hurricane reduces "the price-depressing glut" of all sorts of things-like clothing, medicine, and housing. Yes, government officials are a little bit like a hurricane and we should have civil defense warning sirens whenever they come near.

Maybe this policy of destroying food will soon apply to other industries as well. Perhaps next they'll decide to pay medical schools not to train doctors. Ooops, they already did that in New York. Well, maybe they'll destroy 7% of all shoes in order to raise prices for shoemakers? Or perhaps the government will raise the prices for my profession by shooting 7% of all economists? Now there's an idea that might really help the economy!

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City Cleans Up at Thomas Square

By Jay McWilliams

The last time I wrote an article for SB News, I was bemoaning the fact that the city was remiss in keeping our parks clean, as witnessed during an October fair by the Pacific Handcrafters Guild at Ala Moana park.

This time some praise is in order for the efforts shown by the parks department for the 26th Annual PHG Christmas Fair at Thomas Square Park. It seems that Christmas came early for PHG during that fair, which was held Dec. 2 and 3, 2000. For the first time that anyone can remember, extra city crews were sent to Thomas Square prior to and during the event, which attracted nearly 15,000 people in two days.

Normally, the guild picks up trash in the park days before it holds its annual Christmas fair there and it pays temporary helpers all weekend to keep the park and bathrooms clean during the event. While this year saw no difference in the guild's cleaning effort, those in charge of the fair witnessed an extra effort by the city to help remove rubbish from the grounds on Friday, as well as keep trash cans emptied and the bathrooms cleaned and maintained a few times throughout the weekend.

For more than a quarter of a century, this annual event has been a special occasion for those who participate, but thanks to the cooperation of the city and the artists' group this year, it was better than ever. The public had a chance to visit a clean park, view the work of the 88 participating artists and enjoy a variety of food and entertainment all weekend long.

Maybe the City Lights Festival, which was held that same weekend, inspired this Christmas cleanup. Or maybe the Grinch was too busy in Washington, uh, I mean Hollywood, to bother with us in Hawaii. Whatever the reason, the extra effort made by the city was not only appreciated by those who noticed, it was a terrific Christmas present for everyone who stepped foot inside Thomas Square park that weekend.

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Giving Small Business A Voice

By Suzanne Gelb, Ph.D., Psychologist

With the approach of the upcoming legislative session, the question is whether more citizens will make their opinions known to their elected officials or whether it will be a process in which "others" get involved. Many business owners and employees spend a lot of energy discussing amongst themselves their dissatisfaction about the economy and the challenges of doing business. While temporary relief may be gained from venting and brainstorming about financial difficulties and job stress, positive action is needed to create permanent change. Let's discuss how business owners can transform the business climate by taking action and informing elected officials of their positions on issues.

Fear. Prior to the advent of high tech communication, people often avoided expressing themselves in public settings such as a legislative arena, because this meant speaking before a group of people. Stage fright and discomfort with public speaking caused many to forgo sharing their views. However, in the current era of advancing technology there is ample opportunity to comfortably express one's opinions on critical issues. It is not even necessary to make a telephone call. E-mails or faxes, for example, offer expedient access to elected officials and privacy is afforded if desired.

Confidence. Many people have informed opinions on issues that they believe could be of benefit to society. They recognize the abuses that create an unjust society, and they know which officials should be recalled for their involvement with the abuses. However, when these individuals lack confidence, fear of criticism can paralyze them from self-expression. One way to overcome fear is to challenge it by taking action. Participating in a group or an organization that shares similar beliefs can also help one harness the courage to voice one's opinion.

Too Busy. "We're too busy to get involved," is a frequent response from business representatives and professionals when they are asked to testify during a legislative session. Although bulging "to-do" lists are realities, business owners must prioritize their tasks, so that they can take time to make their voices heard. As restauranteur Jack recalls, "Last legislative session I felt tempted to let others do the protesting about a potential tax hike because my hands were full just running my business. However, after reflecting about my responsibilities as a citizen, from exercising my voting privileges to offering testimony, I decided that if I did not participate, I might not even have a business to run!"

Big Business. It is time to get involved in the biggest business on earth - our Government! As citizens and business owners, we constantly make decisions about how to run our businesses. It is important that we communicate with our representatives so that we have a say in how government is managed. The voice of small business, when heard by our elected officials can help government run more efficiently. So let's contact our representatives and let them know where we stand on the issues.

For more information call Dr. Gelb's office at 943-2994. Her book, "Welcome Home: A Book About Overcoming Addictions," is available at www.amazon.com.

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STATE TAX TIPS

Great Start to the New Year

By Marie Okamura, State Tax Director

Happy New Year and welcome (officially) to the new millennium! Let's begin with some great news for Hawaii's small businesses.

First, several tax--reducing rate changes became effective on January 1, 2001.

  • Income Tax - Individual income tax rates are reduced across the board with the top rate dropping from 8.75% to 8.5%.

  • General Excise Tax - The phased-in deduction for subleases has increased from 0.375 to 0.5, and the phased-in deduction for business-to-business transactions eligible for pyramiding relief has increased from 0.125 to 0.250 (effective tax rate reduced from 3.5% to 3.0%).

  • Public Service Company Tax - The phased-in deduction for transportation services provided to construction contractors has increased from 0.125 to 0.250 (effective tax rate reduced from 3.5% to 3.0%), and the tax rate on sales of telecommunications services by a public utility to an interstate telecommunications provider for resale has dropped from 5.5% to 5.0%.

    Second, we are pleased to invite you to a FREE small business fair that we hope will become an annual event. The 2001 Hawaii Small Business Fair will be held on Saturday, February 10, 2001, at Leeward Community College from 9:00 AM to 4:00 PM, and is being sponsored by a unique coalition of federal and state government agencies as well as a number of private, not-for-profit organizations.

    Representatives of more than 30 federal and State government agencies, local chambers of commerce, and nonprofit organizations that provide free and low-cost assistance, training, and financing to small businesses will be available for you to talk to at their booths. Free seminars also will be offered throughout the day on a range of topics including is a small business right for you, starting a business in Hawaii, developing a business plan, choosing an entity type, obtaining financing, recordkeeping, employees vs. independent contractors, using the Internet, taxes, and much more.

    I'd like to encourage all of you to attend the 2001 Hawaii Small Business Fair. This is a great opportunity to learn more about the business of being a business and to find resources for training, financing, and other assistance that can help you succeed. For more information, see the flyer on our website at www.state.hi.us/tax, or call us at 587-1577.

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