Taxes in Hawai‘i Are Much Too High, Say 43% of BOSS Survey Respondents

What Changes in Hawai‘i Taxes Do You Favor?

In May, state legislators passed, and Gov. Josh Green signed into law, a major income tax cut for Hawai’i residents. However, this year’s Legislature rejected Green’s proposed $25 visitor tax and a proposed exemption to the excise tax for food sales.

Please note: We conducted most of the BOSS Survey of local business owners and executives and all of the 808 Poll of the general public during the legislative session, before the income tax cut received final approval.

“I see businesses picking up more of the tax burden, whether it’s car registrations or in our employment taxes. Visitors too. They get dinged all the time with an extra fee for renting a car.”

— Leila Thompson | Window Trends

“I strongly oppose a visitor tax. If you want less of something, you tax it. If you don’t want less tourism, which drives our economy, then don’t raise taxes.”

— Byron Kay | Kona Huna Divers

Did the Cost of Goods and Services Go up a Lot, a Little or Hold Steady?

One recent phenomenon in the news concerns inflation and people’s perceptions of it. The Bureau of Labor Statistics says consumer prices nationwide for all items rose 3.4% from December 2022 to December 2023 – a little more than half the rate of 6.5% in the previous 12 months. And though the inflation rate fluctuates from month to month, the overall inflation rate for the first four months of 2024 is similar to 2023’s.

Nonetheless, surveys show many people do not feel inflation has fallen. One commonly cited explanation: These people see that prices overall have not come down but remain much higher than before the pandemic. In this explanation, people equate today’s persistent high prices with continued high rates of inflation.

The next two questions in the BOSS Survey aim to test similar perceptions about higher prices among businesspeople. First, we asked businesses how much they had raised their own prices in the past year – something they are unlikely to exaggerate. We also asked them how much their vendors had raised prices in the same period. We compare the answers side by side.

I think that if people’s perceptions of prices were generally accurate, then the numbers in each row would be more similar. After all, the BOSS Survey includes many local businesses that supply goods and services to other local businesses. Both groups of businesses have imposed higher prices on others, and paid higher prices imposed by other buinesses.

While only 15% of businesses surveyed said they raised their prices a lot in the past year, 41% of them said their vendors raised prices a lot. Knowing a bit about human psychology, I think it only natural that people and businesses are more likely to emphasize in their minds the price increases imposed on themselves, and less likely to emphasize in their minds the price increases they impose on others. I would probably think that way myself.

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Methodology for These Surveys

The BOSS Survey and 808 Poll were conducted by Anthology, a Hawai‘i marketing group that is part of a global company called Finn Partners.

The respondents for the BOSS Survey were found by using a company listing purchased from a third-party business sample provider, as well as Hawaii Business Magazine’s Top 250 list and classified yellow page listings.

Interviews were done online as well as by telephone with owners, senior executives and other people at participating companies who were knowledgeable about their companies’ operations and finances. A total of 407 random interviews on O‘ahu, Maui, Hawai‘i and Kaua‘i were conducted from March 27 to May 15, 2024. A sample of this size has a margin of error of plus or minus 4.86 percentage points with a 95% confidence level.

The sample of companies was stratified based on number of employees. Businesses with one to nine employees were designated as “very small” and those with 10 to 49 employees were designated as “small.” Medium-sized companies were those with 50 to 99 employees and companies with 100 or more employees were classified as “large.” The data was weighted to reflect the proper proportions of each company segment based on numbers of employees as reported by the state of Hawai‘i Department of Labor.

A secondary goal was to complete interviews with a target set of companies that derive relatively significant proportions of their revenues from retail sales. A total of 71 were surveyed in this segment.

A separate online survey called the 808 Poll was conducted of the general public. A total of 459 surveys were conducted from March 22 to April 1, 2024. Respondents were screened to ensure they were at least 18 years of age and fulltime Hawai‘i residents.

The margin of error for a sample of this size is plus or minus 4.57 percentage points with a 95% confidence level.