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Charlotte Amalie
Friday, August 19, 2022
HomeNewsArchivesCUT IN UNEMPLOYMENT TAXES WINS BACKING

CUT IN UNEMPLOYMENT TAXES WINS BACKING

Most of the people who spoke at a Senate committee hearing Tuesday voiced strong support for reducing employers' unemployment insurance contributions to assist local businesses and stimulate the local economy.
Surprisingly, many said the unemployment insurance fund has more than enough money in it, and thus the government can afford to give local employers a break.
"The fund has become too solvent and it is dampening economic activity by taxing employers beyond the level necessary to ensure solvency and maintain economic stability," Lauritz Mills, chief economist at the Bureau of Economic Research, said at the Labor and Veterans Affairs Committee meeting.
"A reduction of the employer's tax burden would stimulate the economy, particularly at this time when the economy is weak and there is little employment growth," Mills said. "The most immediate benefit is a reduction of the cost of doing business, thereby making the territory more competitive and attractive to investors."
Strengthening businesses would in turn increase job opportunities, said Mills, who also suggested increasing the maximum benefits paid to the unemployed.
"A policy change that reduces the employers' taxable rates while increasing the amounts of benefits paid to unemployed workers will help to maintain purchasing power and revive economic activity," she said.
The news the fund was "too solvent" surprised Sen. Gregory Bennerson.
"It's one of the few areas in the Virgin Islands government that the word of 'too solvent' is used. I never figured a word would be used like that when you're describing the Virgin Islands government and funds," Bennerson said.
The V.I. Labor Department is preparing to send proposed legislation to Gov. Charles Turnbull to adjust employers' tax rates, which includes reducing the maximum tax rate and reducing the tax rates for new employers.
"We believe the recommendations in the proposed legislation will help the unemployment insurance program in the Virgin Islands adjust to the needs of today's business community," said Barbara Wheatley, director of the Division of Unemployment Insurance. "The changes will . . . increase the efficiency and effectiveness of the unemployment insurance programs in the U.S. Virgin Islands for everyone."
A measure reducing employers' unemployment insurance contributions by 50 percent is included in the majority bloc's Economic Stimulus Act, which is currently being developed, Committee Chairman Roosevelt David said.
Simply reducing employers' contributions received support from the private sector.
"At the present time, when the general economy of the Virgin Islands is at an all-time low, with no clear view of any changes, we feel it would be timely for the Legislature to review the rates used by this agency," St. Croix Hotel Association Treasurer Wendell Snider said.
"It is our opinion that the rate should be reduced either by lowering the cap or reducing the percentages, because more revenue will return to the economy and therefore, the government of the Virgin Islands," Snider said. "We are aware that any changes made must be made carefully to ensure the working people of the territory are well-protected."
Rates in the territory are generally higher than those paid in the states, Snider added.
David and Bennerson were the only two committee members to attend the hearing. Sens. George Goodwin, Alicia "Chucky" Hansen and Allie-Allison Petrus were excused.
David said he was pleased there was such wide agreement on the proposal.
"It seems to me that everybody is reading from the same page here today," he said. "Everybody recognizes that businesses are having a tough time and that a reduction in taxes in absolutely necessary for the revitalization of the economy."
David also said he hoped the bill would pass with cooperation between labor and business.
"We in this community, a lot of us, seem to think that there should always be a war between management and labor, labor and businesses, and that's a farce, because as I always say, management and labor are inextricably bound, they go hand in hand," David said.
"We've got to realize and recognize that businesses are suffering and if we are unable to get businesses up and running to fuel this economy, everything collapses."

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Most of the people who spoke at a Senate committee hearing Tuesday voiced strong support for reducing employers' unemployment insurance contributions to assist local businesses and stimulate the local economy.
Surprisingly, many said the unemployment insurance fund has more than enough money in it, and thus the government can afford to give local employers a break.
"The fund has become too solvent and it is dampening economic activity by taxing employers beyond the level necessary to ensure solvency and maintain economic stability," Lauritz Mills, chief economist at the Bureau of Economic Research, said at the Labor and Veterans Affairs Committee meeting.
"A reduction of the employer's tax burden would stimulate the economy, particularly at this time when the economy is weak and there is little employment growth," Mills said. "The most immediate benefit is a reduction of the cost of doing business, thereby making the territory more competitive and attractive to investors."
Strengthening businesses would in turn increase job opportunities, said Mills, who also suggested increasing the maximum benefits paid to the unemployed.
"A policy change that reduces the employers' taxable rates while increasing the amounts of benefits paid to unemployed workers will help to maintain purchasing power and revive economic activity," she said.
The news the fund was "too solvent" surprised Sen. Gregory Bennerson.
"It's one of the few areas in the Virgin Islands government that the word of 'too solvent' is used. I never figured a word would be used like that when you're describing the Virgin Islands government and funds," Bennerson said.
The V.I. Labor Department is preparing to send proposed legislation to Gov. Charles Turnbull to adjust employers' tax rates, which includes reducing the maximum tax rate and reducing the tax rates for new employers.
"We believe the recommendations in the proposed legislation will help the unemployment insurance program in the Virgin Islands adjust to the needs of today's business community," said Barbara Wheatley, director of the Division of Unemployment Insurance. "The changes will . . . increase the efficiency and effectiveness of the unemployment insurance programs in the U.S. Virgin Islands for everyone."
A measure reducing employers' unemployment insurance contributions by 50 percent is included in the majority bloc's Economic Stimulus Act, which is currently being developed, Committee Chairman Roosevelt David said.
Simply reducing employers' contributions received support from the private sector.
"At the present time, when the general economy of the Virgin Islands is at an all-time low, with no clear view of any changes, we feel it would be timely for the Legislature to review the rates used by this agency," St. Croix Hotel Association Treasurer Wendell Snider said.
"It is our opinion that the rate should be reduced either by lowering the cap or reducing the percentages, because more revenue will return to the economy and therefore, the government of the Virgin Islands," Snider said. "We are aware that any changes made must be made carefully to ensure the working people of the territory are well-protected."
Rates in the territory are generally higher than those paid in the states, Snider added.
David and Bennerson were the only two committee members to attend the hearing. Sens. George Goodwin, Alicia "Chucky" Hansen and Allie-Allison Petrus were excused.
David said he was pleased there was such wide agreement on the proposal.
"It seems to me that everybody is reading from the same page here today," he said. "Everybody recognizes that businesses are having a tough time and that a reduction in taxes in absolutely necessary for the revitalization of the economy."
David also said he hoped the bill would pass with cooperation between labor and business.
"We in this community, a lot of us, seem to think that there should always be a war between management and labor, labor and businesses, and that's a farce, because as I always say, management and labor are inextricably bound, they go hand in hand," David said.
"We've got to realize and recognize that businesses are suffering and if we are unable to get businesses up and running to fuel this economy, everything collapses."