Delegate Gregorio Kilili Sablan (Ind-MP) said the Republican-Ryan budget plan will have the most negative impact on least well-off people just like those in the CNMI, at a time when the Commonwealth is already faced with pension, health and utilities crises.
Sablan, an independent caucusing with the Democrats in U.S. Congress, said the GOP-Ryan plan is also “Robin Hood in reverse-cuts taxes for the rich, raises taxes for everyone else.”
“We all support the idea of getting the federal budget under control and reducing our national debt. But the Republican-Ryan Budget does that by hurting the least well-off Americans, like the people of the Northern Marianas,” Sablan told reporters in an interview at his office.
Gov. Benigno R. Fitial, chairman of the Republican Party in the CNMI, has been campaigning hard to have his candidate, Dr. Ignacia Demapan, replace Sablan in the Nov. 6 midterm elections.
The “Republican-Ryan” budget is a popular phrase for the budget plan by U.S. House Budget Committee chair Paul Ryan, the running mate of Republican presidential candidate Mitt Romney.
Sablan cited some specific examples of the negative impacts of the Republican-Ryan budget on the CNMI, including changes in CNMI income taxes if there are changes in the U.S. income taxes. The CNMI mirrors the U.S. tax code.
“There are cuts for the rich, and there are increased taxes for the rest of us,” said Sablan.
He said the Republicans want to end President Barack Obama's tax cuts for working poor households or those with incomes below $10,000.
“That's 1 in 4 households in the Northern Mariana Islands who would see their after-tax incomes fall by 2 percent, on average,” Sablan told reporters.
He said Republicans also want to close the middle tax breaks like the mortgage interest deduction, and the Congressional Joint Economic Committee staff estimates that means over $1,300 more per year in taxes for the typical family.
Sablan also said under the Republican-Ryan budget plan, people with income above $1 million would receive a $265,000 average annual tax cut, on top of the $129,000 they receive from extending the Bush tax cuts.
Their after-tax incomes would increase by 12.5 percent, on average-seven times more than the 1.8 percent average gain for middle-income households.
Sablan said the top 1 percent of taxpayers would receive 45 percent of the new tax cuts, or nearly as much as the rest of the nation combined.