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Back Opinion Doctor’s Notes Privilege of doing business

Privilege of doing business

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THE Guam Tax Code demands that every person or company engaging in the practice of commercial business on Guam shall pay a 4 percent tax on the gross income of such practice.

The Guam Tax Code originally spoke directly to banks, hotels and insurers paying this gross receipts tax. Over the years, banks, hotels and insurance companies have received legislative relief from paying for the privilege of doing business on Guam.

These tax exemptions were presumably supposed to stimulate the economy on Guam and provide high-paying jobs for people from the villages of our island. Instead, most banks and hotels hired cheap foreign laborers and began sending as much work off-island as possible in order to make as much untaxed money as possible. One local insurer went so far as to have its local phone calls answered by a Manila company that also doesn’t pay any taxes on Guam.

Despite the destructive effect that these unhealthy tax exemptions have on our fragile island economy, the Guam Economic Development Agency has refused to rescind these hurtful tax exemptions which have created an antagonistic environment amongst our community’s hard-working private businesses.

While insurance companies and hotels use cheap Filipino labor to please their off-island investors, sick children and senior citizens must pay for the privilege of being sick on Guam. Every pneumonia, every infected cut is made more costly by a tax code gone mad. Former Guam Legislature Speaker Mark Forbes recognized the dangerous cruelty of this sick tax and he introduced an act to remove the GRT on medicine and medical services.

Sadly, Sen. Forbes became seriously ill and he was unable to convince his legislative colleagues to challenge local banks, insurers and hotels on his behalf. So today, you and your family continue to pay for the privilege of certain local businesses avoiding paying their fair share of taxes.

By not paying their taxes, banks and hotels take away money that could help Guam Memorial Hospital pay for medicine and blood. By ignoring their tax obligation, health insurance companies avoid paying for government regulators who could enforce American national standards for health insurance coverage.

As certain pampered island businesses ignore their tax obligations, Warren Buffet has issued a national call for the ridiculously rich to pay more. Our island senators should heed the Oracle of Omaha and force banks, hotels and insurers to pay more for the common good. Across the pond in Saipan, our Northern Marianas brethren are now paying dearly for the folly of pampering carpetbaggers.

Saipan’s government hospital, the island’s only hospital, is broke. The hospital’s debts include $3.1 million for general medical supplies; $2.3 million to the Retirement Fund; $2.3 million to pharmaceutical companies; a $2.1 million utility bill; housing benefits of $918,857; $713,000 for laboratory supplies; and the $800,000 biweekly payroll that local officials have no idea how they are going to pay.

People from Saipan are now routinely flying to Guam for medical care. They are now joining the thousands of people from the Federated States of Micronesia who are here for medical care. Guam has become the Mecca of Medicine for Micronesia. If we are to perform competently our role as the vanguard of health care for our region, then we need to tax fairly our banks, hotels and insurance companies. Let’s not let our island’s tax burden only fall on the medical clinics and the pharmacies.

And, supposing we just want to run our island community more fiscally responsibly and merely pay our bills on time, all businesses should fairly be made to pay for the privilege of doing business on Guam.

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