How will Obama's tax plan affect Guam?

by Ken Quintanilla

Guam - Following President Barack Obama's plan to lower tax rates unveiled last week, one Guam senator wants to know just what effects it will have on the Government of Guam's finances as the government relies on the mirrored federal income tax scheme.

Vice Speaker of the 31st Guam Legislature B.J. Cruz sent a letter to Rev & Tax's John Camacho and the Special Economic Service, which is chaired by Senator Ben Pangelinan, requesting they review the President's proposal and determine how such changes may affect GovGuam's revenue stream from income taxes. He says in the past, whenever there's been a tax decrease it had always affected Guam's revenue, whether it was covered by the federal government reimbursements or was exempted.

"I don't think we can be exempted, in the past we could probably get a reimbursement but if we don't we would have to eat that…I'm just trying to get everyone to understand that something is going to be happening soon and we shouldn't be getting into this major debt but nobody's listening, but I still feel it's my responsibility to point out to people that there are ramifications of some of these things that are happening," said Cruz.

Obama's plan cuts wasteful loopholes and tax breaks and reduces the tax breaks and reduces the federal deficit by as much as $1.5 trillion, which is part of an overall plan to cut $3 trillion in spending over ten years and to boost employment through his proposed American Jobs Act.