Happy New Year and welcome to 2025! Like we did at the start of the two prior years, we look at some of the news — the aggravations and the delights — and put them into a Word Find puzzle.
The first few months of 2024 were dominated by the legislative session, with the governor again introducing a tax-slashing Green AFFORDABILITY Plan. While the ACRONYM “Gap” didn’t catch on, the idea of lowering taxes did. At the end of the session, a bill was passed and signed that DOUBLED the standard DEDUCTION in 2024 and will continue to hoist it in EVEN numbered years. Every odd numbered year, the law fattens the tax BRACKETS enough so that new WITHHOLDING tables will be used. This, of course, means that the government will need to watch what it SPENDS.
Also in that session, the health care industry scored big with a GENERAL Excise Tax law making medical services paid for by FEDERAL programs, namely Medicare, Medicaid and TRICARE, not TAXABLE. But it’s all in the timing – the exemption is effective in January 2026. We hope that our MEDICS don’t find it necessary to board ONE-WAY FLIGHTS out of here until then!
We threw a bright light on the Department of Education for a lot of things last year, a couple of times for hoarding SCHOOL Impact Fees and its predecessor FAIR SHARE Contributions. That department has the AUTHORITY TO TAX and uses it, but the money is collecting dust in a room somewhere.
Also in 2024, we in the Foundation began a campaign to ROOT out “SECRET LAW” within the Department of Taxation. So far, we have seen ELEVEN out of 140 or so “Administrative DIRECTIVES,” which are directions from the Director of Taxation to the department employees. We have been focusing on one of these, number 2021-01, BECAUSE we think it contains DISINFORMATION; we filed a lawsuit seeking to have it declared invalid. The Circuit Court tossed out our lawsuit, but this THERMONUCLEAR war is by no means over. Also, on our to-do list is getting a peek at the other 130 directives, along with related internal guidance like Compliance Division MEMORANDA.
The terms in all capitals in this article can be found in the Word Find 15X15 matrix above. Words and phrases can be forward, backward, up, down or diagonal. And please look carefully at the unused letters, because they contain a message. Good luck in the New Year!
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Tom Yamachika is president of the Tax Foundation of Hawai‘i.
