The Board of Education is proposing to impose a graduated increase on the withholding tax for those earning more than $50,000 per annum, with the funds collected to go directly to the Public School System\u2019s yearly budget.<\/p>\n
The idea is to increase the current withholding tax of 9% by one percentage point to 10% for those who make $50,000 per annum, and the tax will increase gradually as one\u2019s income increases. This tax is imposed on everyone in the CNMI but the proposed increase is only for those earning $50,000 per annum or higher.<\/p>\n
In an interview with BOE board member Phillip Mendiola-Long yesterday, he said that the BOE submitted five proposed bills to the Legislature but the most significant was the revenue bill that would increase the tax for the wealthy and generate additional funding for PSS.<\/p>\n
\u201cIt is imperative that the Legislature look at these bills immediately. We don\u2019t have much maneuvering ability when it comes to expenditure so even just the slightest change in the distribution from the general fund to the Public School System, we may have a problem with meeting our obligations and these bills are seeking to prevent that,\u201d he said. <\/p>\n
Mendiola-Long explained that the increase varies and depends on income per annum and will only apply to those making $50,000 and over. <\/p>\n
He said the BOE felt there would be some room to derive some revenue from the wealthier members of the community, considering that the CNMI is among the lowest tax territories in the entire country.<\/p>\n
\u201cHopefully\u2026the Legislature will feel the same. If you\u2019re at $50,000 right now, you cap out at 9%. What this bill does is, if you\u2019re making $50,000, you\u2019ll go up to 10%, $60,000 to $75,000 you\u2019ll go up to 11%, and then it increases to $150,000. If you make $150,000 or more, you\u2019ll pay 12% or 13% tax,\u201d he said. <\/p>\n
PSS had originally asked for a budget of $50 million for this fiscal year; it eventually got $37 million. That forced PSS to reduce personnel salary by 50% and prompted talks about the proposed tax hike.<\/p>\n
\u201cWe have a $45-million personnel budget and we were only given $37 million to operate. There\u2019s no more we can cut. We already cut the teachers; we cut everybody, so if the Legislature is asking us to cut more, that would have to translate to a reduction of force. We don\u2019t want to do that. It hurts our kids, and it hurts the schools,\u201d he said. <\/p>\n
Mendiola-Long said the focus is to direct any tax increase to those with higher income and avoid hurting those who are struggling already. <\/p>\n
\u201cWe\u2019re hoping the Legislature sees that and that the more wealthy and blessed in our community are a little more giving and doesn\u2019t give the Legislature a hard time for passing this piece of legislation,\u201d he said. <\/p>\n
The BOE also introduced a bill that would impose an additional tax on luxury items. <\/p>\n
\u201cWe\u2019ve also introduced a bill to add tax on luxury goods. So if you\u2019re blessed enough to buy a Louis Vuitton purse, or if you\u2019re blessed enough to buy a $12,000 necklace, we hope that you\u2019d be willing to pay a little bit more of tax on top of that and that would be directed to the schools,\u201d he said. <\/p>\n","protected":false},"excerpt":{"rendered":"
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