Guam Tax Commission ponders impact of Trump's policy changes - KUAM.com-KUAM News: On Air. Online. On Demand.

Guam Tax Commission ponders impact of Trump's policy changes

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It only reconvened a year ago, with one of its goals to look at de-linking from the US Tax Code. However in the year that's passed, the country has elected a new president who is proposing a new tax plan that could have detrimental impacts to Guam, including over $100 million in lost revenue.

The Guam Tax Commission has been put on notice, as chairman Senator Michael San Nicolas said, "We may be at the helm of a very urgent situation and the community may be looking at us to stave this off."  Reconvening in 2015 after being dormant for eight years, the commission may have a lot more work ahead of them.

Senator San Nicolas also added, "In a nutshell, we have a president-elect whose political party is in power in the House and the Senate, and if his most recent proposed tax policy changes begin coming into fruition in the current government, it's going to have significant impact on our territory."  Because the Guam Territorial Income Tax is linked between the federal income tax, if the federal income tax is changed as suggested by Trump's plan, GovGuam will lose income tax revenue.

Based on Tax Policy Center analysis, the proposed tax plan will result in revenue from the average household to decrease by over $2,900 in 2017. And with about 43,000 households on Guam, that could equal $126 million in lost revenue for Fiscal Year 2017. "But with these kinds of potential impacts looming, we may need to begin working more expeditiously to decide whether delinking is beneficial for the island depending on what begins to materialize as actual policy," said the senator.

Commissioner and University of Guam economist Dr. Roseanne Jones says this proposal is clearly a moving target, but it's best to have a heads up on the possibility of changes. She adds the $126 million potential lost revenue is sadly a best-case scenario, noting, "Only because there are so many other issues out there, what happens with our tourism industry, again in light of TPP and again in light our relationship with Asia, what happens with the military investment? Those questions aren't part of this, this is just looking at the base we have right now, and if it drives business activity away, if our import expenses increases, there may be more to this story than that number."

Commissioners noted this analysis doesn't take into account other policy changes that may also happen in terms of food stamps and Medicaid. San Nicolas says they want to be ahead of the curve especially with what could happen in Trump's first 100 days in office. The analysis will be forwarded to the governor, congresswoman and the Guam Chamber of Commerce.

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