On the Campaign Trail 2012
Tax reform and streamlining government operations — including the establishment of an independent investigative arm of the government to probe waste, fraud and abuse — are two of the nine “Plan of Action” points for economic development of the territory presented yesterday by the gubernatorial team of “Save and Sandra” to the Chamber of Commerce.
Candidate for governor, Save Liuato Tuitele and his running mate candidate for lieutenant governor, Tofoitaufa Sandra King Young, made their presentation at the Tradewinds Hotel in the Naumati Room, attended by some twenty members of the private sector.
Save told the gathering that the “spirit of cooperation” between the government and the private sector is needed in “order to turn our economy around”.
“Years of fighting amongst ourselves, fighting with the government, fighting in the business community — and vice versa – has to come to an end [because] it’s not getting... anything done,” said Save, a retired Associate Judge of the High Court. “We have a lot of people who are out of jobs. We have businesses that are not going anywhere. And we continue to depend solely — rely solely — on federal money that has driven our economy in the last 10 to 15 years. That has to be changed.”
“We all agree that it’s the business community that creates jobs. We all need to come together with a plan, work together, bring new ideas, some new vision on what we need to do to help the private sector grow,” he said, adding that if the businesses grow, that means more jobs for American Samoa’s workforce.
“We [also] need to find ways to invite more businesses into the territory [and] we need to work” together to bring those businesses from off-island, he said, adding that the team’s action plan for economic development is not just “for the near future, but for the long term”.
Tofoitaufa told the audience that when the team was putting together their campaign platform, “we always come back to the economy. No matter what is happening with our health care, immigration, business and jobs, it always comes back to our economy.”
“And unless we do something to turn our economy and put it back on track, to where we’re heading into the future so it becomes a more sustainable economy — driven by our private sector — we’re going to be in huge trouble in the future,” she said. “We are already experiencing that and you can see that in the 2010 census where our population has gone down to 55,000 people, and those are the numbers the federal government is going to use from now on until the next census to determine federal grants to come to our territory.”
She also shared with the private sector that she is very thankful that Save, who is not a politician and has been back home for some eight years now, has a finance background which was used during his time in the military with the Criminal Investigation Division, investigating fraud, waste and abuse in military offices.
“He had to have a very strong background in finances” for the CID job, she said adding that she is learning a lot about finance— including taxation— from Save, who served in the military for many years. For herself, she said she has learned the struggles of a small business dealing with the government during the time her parents were in the newspaper industry years ago. She and her husband currently own a small business, dealing with computers.
“Because of our broad experience in small businesses, we— Save and I— are very committed to making the private sector the premier industry in our territory to help drive the economic sustainability of our territory in the future,” she pointed out.
“So we don’t have all the answers,” she said and noted their presentation was only for selected points on economic development due to the time limitation for the Chamber meeting.
She also asked Chamber members in attendance to write down their suggestions, ideas and criticism about their economic development platform presentation for the team to review later in order to be able to “strengthen our economic platform”.
Taxes are one of the areas that give a lot of businesses a headache, and if elected, “we will introduce legislation to reform our tax laws to mirror that of the federal government,” said Save and shared with the audience that during the team’s walk thru the villages it was learned that many people, including some in the private sector didn’t know that American Samoa is still using the 2000 tax table to calculate taxable income, which stands at 15% while the federal taxable income table has dropped down to about 9-10% in 2011.
He said the proposed legislation would have that whatever the federal government tax table issues each year, it will be used by American Samoa instead of using the high percentage rate of the 2000 tax table.
Another plan by the team, if elected, is to repeal the current 4% income wage tax. A sample survey by the team found that a family of four with an annual gross income of $20,000 would pay, under the current local taxes, $800 instead of a lower tax payment of less than $200 if the 2011 federal code was used.
He said low income families are the ones who are hit hard by this local tax law.
The team also wants to repeal the new 2% wage tax, which was enacted this year to first repay the $3 million loan from the ASG Workmen’s Compensation Account to the LBJ hospital and after the loan is paid off, revenues are to go into LBJ’s operation
Save said this wage tax “is unfair” because it targets “only people who are working — the wage earners” but not people with retirement or social security benefit checks. He said this wage tax is supposed to help the hospital “and we all go to the hospital and yet only a few people are required to pay this [tax].”
Additionally, eliminate the excise tax except for alcohol, beer, tobacco and items for personal use. Instead, the gubernatorial team proposed imposing a 5% sales tax on goods and services.
He said the sales tax “is easy to collect” and easy to control “and it’s a fair tax for everyone”. The team also wants to reduce corporate tax; and review the possible elimination of the dividend withholding tax and interest withholding tax.
With the proposed tax elimination and reduction, Save said the private sector now wants to know how the team would fund the government. He said American Samoa gets $440 million every year in federal money for a population of about 55,000 and that’s a lot of money.
“In addition to that, we’ll be taking a look at our expenses — how we’re spending our money. We’ll be looking at ways to save money,” he said.
The team also wants to review the Tax Exemption policies and make them fair for new and failing businesses. “We want to use it as an incentive, plus other incentives for companies, especially companies that are failing as well as for new companies and companies that need help,” he said. “I think currently, it’s being handled by the board and their decision is not put out to the public.”
STREAMLINE GOVERNMENT OPERATIONS
As part of streamlining government operations, the team proposed the establishment of an independent “Fraud, Waste and Abuse Investigative Agency” and Save said the agency will be responsible for investigating “corruption within government” and work together with the Comptroller and the Territorial Audit Office to conduct among other things “crime threat assessment, [and] crime prevention surveys.”
“We want to take this [new] office away from the politics,” he said, adding the office will be headed by someone appointed to serve for ten years, but he didn’t say as to who will appoint the person to head this office, which would have its own staff, attorney and support personnel.
This agency can also make recommendations for corrective actions within any ASG department found to have deficiencies in any areas of operation, he said.
Other areas to streamline government proposed by the team:
• eliminate or merge redundancies in services and programs;
• control use of vehicles and gas
• review locally-funded off-island travel authorizations
• review payroll records
Save claims there is a dire need to conduct a full review of payroll records to ensure that only people who are on island working in ASG are getting paid.
Samoa News will report in future issues more on the team’s platform on economic development and questions from Chamber members.