The above commentary appeared in the Honolulu Advertiser January 13, 2009. The following is an excerpt from Roth’s Politics in Hawaii: Is Something Broken? in Honolulu Magazine, April 28, 2009:

On Act 221’s Anonymous Beneficiaries

There is seemingly no aspect of local politics that is immune to our habitual lack of transparency and accountability. Consider the practical impact of Hawaii’s high-tech tax credit, Act 221. It gives a 100 percent credit to anonymous investors, even when the high-tech business in which they invest fails to create a single job, or fails to generate a penny in revenue. Up to 49 percent of the investment doesn’t even have to be spent on high-tech in Hawaii!  … Nobody knows what the total tab for Act 221 will be—it could exceed a billion dollars. We do know that other taxpayers will have to pick up that share of the cost of government in Hawaii. I’m not against using a reasonable amount of our state’s resources to help build a high-tech or movie industry, but the way we currently do it reflects politics at its absolute worst. A small group of anonymous beneficiaries is feasting while everyone else engages in open competition for the scraps that are left.

This anonymity is absolute. Because it is confidential taxpayer information, officials could go to jail for divulging key details. … The lack of transparency has kept the public in the dark about Act 221, making any form of accountability impossible. This might be less upsetting if the act had worked as advertised. However, the high-tech industry in Hawaii has seemingly gone backward, whether compared to growth in high-tech outside Hawaii or to other sectors within our local economy, according to independent economists hired by the 2007 Tax Review Commission. This is exactly what Hawaii’s most experienced venture capitalists predicted when Act 221 was first being considered in 2001. According to them, Act 221 would make it more difficult—almost impossible—for high-tech companies in Hawaii to secure later-round financing … [because] serious venture-capital investors would not want to get involved in businesses that had been structured and marketed as tax shelters. They said it wouldn’t help high-tech in Hawaii, and it hasn’t.

Understanding Act 221: 100% Credit is Fundamentally Flawed, Honolulu Star-Bulletin, Jan. 13, 2009

Act 221 Too Generous, Not Enough Accountability, Honolulu Star-Bulletin, Feb. 8, 2009

Audit on Oversight of Act 221 Credits (2012)

Politics in Hawaii: Is Something Broken?, Honolulu Magazine, Vol. ILII, No. 11, p. 46 (2008)

QHTB Charts in 2003