The administration’s bill to amend the Earned Income Tax Credit law did not pass the House during final reading Thursday. Nine members voted in support of the bill, one short of the number needed to pass the bill, while six voted no. Six Representatives were absent.
A motion was moved and passed for reconsideration of the bill.
Vice Speaker Fetui Fetu who was one of the six who voted against the bill said he believes by lowering the income level to be eligible for the Earned Income Credit, a large percentage of wage earners would not receive this benefit. He said with the increase in the government’s minimum wage more than 80 percent of government employees would be ineligible.
Rep Malaeoletalu Melesio Gurr who also voted no said the bill eliminates a majority of taxpayers from receiving the Earned Income Tax Credit. “Most of our people will not qualify to receive the credit,” he said. Tax Office Manager Tagoai Vaaimamao Poufa Te’o had explained that the Internal Revenue Service had provided $18 million for each of the past two years to cover the EITC payments. However because of the large number of people who qualified, the total payments amounted to between $24 and $25 million and ASG paid the overage.
Rep Malaeoletalu said Treasury should have asked the IRS for a higher reimbursement allowance in October of 2025 and he hopes that they do so for the upcoming fiscal year. He was also of the opinion that the bill should have been brought to the Fono for discussion months ago to give lawmakers more time to deliberate.
Rep Luaitaua Gene Pan said he voted no on the bill because he wanted to make sure wage earners receive most of the entitlements from their tax returns. He believed the amendments would disqualify many employees from receiving the Earned Income Tax Credit benefits.
The other members who voted against the bill were Vailoata Amituanai, Avagafono Vaimaga Maiava and Sauasetoa Ho Ching.
According to the amendments, the credit for an individual with 1 qualifying child is $10,641, for a person with 2 or more qualifying children the credit is $14,949 and the credit for an individual with no qualifying child is $9,814. The phase out amount is the same as the earned income credit amount.
The Senate approved their version of the bill with one amendment. It has added language stating that if federal funds are mot made available, the American Samoa Government shall not be liable for Earned Income Tax Credit payments under this law.
