The Covenant established for the Northern Mariana Islands a mirror-image taxation system with the U.S. Internal Revenue Code. That includes the provision of applying earned income tax credits for our citizens in the same manner that Guam and the U.S. Virgin Islands applies the earned income tax to its citizens. That code provision today applies to the Northern Mariana Islands. But the government violates the tax code by fully taxing all earned income credit tax credit.
Applying the earned income tax provision means that U.S. citizen must be fully employed to qualify for the credit. The credit today still applies to U.S. citizen workers but the Legislature then turned around and taxes that credit 100 percent so the government retained all payments and citizens get zero payment for earned income tax credit since all the credit went to the 100 percent tax payment scheme. If an employed citizen had an earned income credit of, say, $2,000, the government imposes a 100 percent tax on the $2,000 and the citizen worker gets to receive zero dollars of a tax credit meant for him or her.
The Legislature, including Rep. Angel Demapan, voted not to tax the casino tax. Well, it appears to me at least that Mr. Demapan is fine with taxing 100 percent of our workers’ earned income tax and but zero tax for IPI/Best Sunshine’s casino enterprise.
Mr. Demapan voted to give government employees 5-percent salary increases. A government employee making $39,000 a year (like legislators) will essentially earn a gross bi-weekly salary increase of $75.04.
As if to add insult to injury, legislators’ salaries, on the other hand, which Mr. Demapan voted for himself and colleagues, means a bi-weekly salary increase of about $1,153.85.
A difference of $1,078.81 per pay period. Just imagine the huge difference for employees making less that $39,000 a year.
An enthusiastic apologist of no casino tax, Mr. Demapan says that the Commonwealth money woes are being financed by taxes paid by the casino being built. That’s $15 million a year plus taxes that all other businesses are also required to pay. Compare those to the combined taxes paid by all other businesses and the taxes paid by IPI is a small fraction of government revenues from taxes paid by businesses. And a small fraction of government revenues from taxes paid by working families.
As chairman of the House Ways and Means Committee, Mr. Demapan should include the earned income tax credit payment in the annual appropriations bill. The money goes directly to taxpayers. It costs $16 million. And, it is the law, after all.