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Roth asks Lowell Kalapa whether Hawaii qualifies as a tax hell; Kalapa says yes, pointing to high taxes, hidden costs passed through business prices, and over-regulation. Jack Suyderhoud is more measured — he calls Hawaii a "tax purgatory" — but agrees the system has serious problems. The most striking figure: Hawaii's general excise tax, levied at 4%, is a gross receipts tax applied to virtually every transaction, not a standard retail sales tax. Both guests agree a mainland-style retail sales tax would need to be set at roughly 11 percent to generate equivalent revenue, rising to 20 percent if food were exempted as in California. Kalapa argues the GET, property taxes shifted onto hotels and commercial property, and the hotel room tax impose costs most residents never see directly. Suyderhoud singles out land-use over-regulation as inflating the cost of everything, and notes that unemployment insurance cross-subsidies favor construction and agriculture at the expense of service industries and new entrants. Both describe the state's practice of hiding hundreds of millions in surplus revenue in off-budget special funds as a breakdown of fiscal accountability. Suyderhoud calls for lower income tax rates and a broader bracket structure; Kalapa focuses reform on the GET.
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