Corporate tax incentives. Government health insurance reform. Government pay hike rollback. In lieu of the Calvo administration’s tax hike proposal, senators have offered these alternatives to rescue the government from revenue plunge resulting from federal tax reforms.
Gov. Eddie Calvo is proposing an emergency temporary increase in business privilege tax from 4 percent to 6 percent to make up for the projected $47.9 million decrease in tax revenue as a result of President Trump’s federal tax reform. The BPT increase would be passed on to consumers, who ultimately will shoulder the impact of this additional tax.
Mike San Nicolas Benjamin Cruz James Espaldon
Instead of burdening the consumers, Sen. Michael San Nicolas said Guam needs to tap a new source of revenue.
His legislation, Bill 246-34, proposes to create a tax rebate of up to 75 percent for American companies that would seek the option the option of repatriating billions of dollars in overseas profits to take advantage of lower tax rates under the federal tax reform.
The rebate would be offered to companies that would choose to pass those profits through and pay taxes to Guam.
“Guam is unique as a jurisdiction in the United States as federal corporate income taxes are levied by and paid to the local government instead of the federal IRS,” San Nicolas said.
The congressional candidate said the rebate could attract the tax revenues of those profits of foreign subsidiaries of U.S. corporations by creating an even greater tax incentive for them to pass through Guam.
"This bill tells the largest corporations in America that if they pay their federal taxes in Guam, we'll give you a 75 percent discount,” San