Relating To Tax Expenditure Accountability.
The implementation of SB3146 would significantly impact state law by ensuring that the fiscal implications of tax expenditures are thoroughly analyzed before approval. This could lead to a tightening of tax breaks and incentives offered to various sectors, as lawmakers would be required to present evidence supporting the economic rationale for such benefits. The requirement for a sunset clause on these expenditures also facilitates periodic reviews to ascertain their effectiveness and financial viability.
SB3146, relating to Tax Expenditure Accountability, aims to enhance transparency and evaluation of tax expenditure laws in Hawaii. The bill mandates that any new or modified tax expenditure laws include a comprehensive explanation of their intended economic benefits, a comparison of the supposed benefits against their costs, and a clear termination date not exceeding 36 months. Furthermore, the bill stipulates that detailed revenue estimates and analyses of existing tax expenditures be reported, focusing on metrics such as the number of jobs created and overall effectiveness in achieving the anticipated economic outcomes.
SB3146 may face scrutiny from various stakeholders, especially those who benefit from existing tax expenditures. Supporters argue that the bill will foster more prudent fiscal management and accountability, while opponents may express concerns regarding the potential reduction of incentives that attract business investments and stimulate job creation. The balance between accountability in tax law and the preservation of economic incentives will likely be a topic of ongoing debate as the bill progresses.