Evening bulletin. [volume] (Honolulu [Oahu, Hawaii]) 1895-1912, 1911-01-24
GOVERNOR TALKS
ON TAX SYSTEM
Outlines Needed Legislation
and Urges Change in the
Existing Methods.

Continuing his statements on needed
legislation as begun in am Interview in
the ul1etin yesterday afternoon,
Governor Frear declares that much
needed revision of the Hawaii system
of taxation is needed. With reference
to this, the Governor said;
Questions of finance usually occupy
first place in legislative considera-
tons. OF such questions none is of
greater Importance or OF more general
interest than that of taxation. 1t is
taxation that furnishes the wherewith-
al that makes government possible and
imposes the limits of its activities and
that seriously touches the pockets of
the people. Naturally ana very prop
erly, conservatism is potent in the con-
sideration Of proposed important
changes in methods of taxation, but on
the mainland much progress has been
made of late years in handling this
subject and in these Islands important
changes have been made from time to
time when clearly desirable.
Each session OF the Legislature
turns over more money to the coun
ties, imposes no conditions ON what is
to be done with it, and asks no ques-
lions as to what has been done with
it, until now nearly "a million and a
half dollars year is thus turned over
for the supervisors to do as they please
with, except as to comparatively
small part of it.
The system of elections is such that
| members of the Legislature naturally
| look upon themselves to some extent
as advocates of the needs of their re-
spectivc counties as against the needs
OF the Territorial government Under
the present system, very little respon-
sibility is placed On the county govern
ments or ON the voters of the reSpcc-
tive counties in money matters.
There is simply the great Territorial
money bag, and the question is how
much can he drawn out of it for the
i counties. The whole system is loose
/ illosical, unscientitic and unbusiness-
like This will be so so long as tn,
Territorial and county funds CONF
5 from the same sources, 50 that it il
shall get out of those sources. TIL
| remedy consists largely in separatin
the sources so that the Territorial gov
eminent ON the one hand and the re
1 spective county governments on tn
4 other can rest on their own founda
D ton and be held to accountability ac
D cordingly.
1 Proposals.
How should the sources of revenu
e be divided? Naturally, the countie
S would have the sources of most G
e them from which they now collect rev
C cnues themselves, as, for instance, tn
receipts of their local waterworks, fine
= and costs of magistrates courts Ii
$ cense fees, and perhaps they shoul
t also have the liquor license fees. TIL
e Territory would have many of tn
e minor collections which it now make
and enjoys exclusively. The main ques
$ ton is, How shall the principal take
:. be divided?
: There ought to be little or no diili
y Guilty in settling this question:; and
Il. f,,I
;, coming to he settled ON the MAINLAND
n though to some extent for different rea
D sons In general, the counties shoul
i have the property taxes and the Ter
o ritory should have the income, insur
ance, Inheritance and other taxes {
: similar character This division hap
c parison with the revenues and need
G of the Territory and the counties, re
G spectively, hitherto as shown by eNpe
= rience.
t Property Is taxed in the locatio
| in which it is found, and naturally
e proper subject for local taxation.
e the case of an income tax, the incon
i may be derived from property in dit
feront localities, and it is difficult
o draft any law which would satisfacto
|, rily distribute those taxes among I'll
l., different counties. They would natul
e ally be Territorial taxes. The same
true of inheritance taxes and insuran,
o taxes. There shopld be an exception
u however, in certain property take
= Property which is used in communict
= ton, either of intelligence by electric
ity or otherwise or by transportatio
S in vessels between the Islands or fro
t the Islands to ships at sea, or betwee
n the Islands and the mainland, shou
d be taxed by the Territory, as they al
not local matters.
a Benefits.
In this way, the Territory on Il
one hand and the counties on the 9TH
n would be entirely Independent. Ea'
.el would get the credit for what 1t say
, and the taxes of each could be rais'
or lowered according to the needs
each without unnecessary and diliicu
complications with the other.
. THE only method which has Prov
effectual is that of dividing the soure
II of revenue, leaving property taxes e.