by Miriam Ramirez MD
The Government of Puerto Rico, a US Territory of
American citizens, in a shameful historical move, has joined interested
sectors in the island, including Corporate lobbyists, CFC's, the local
opposition party, workers unions, etc., to lobby Congress for a new amendment H.R.3020,
to the Federal Internal Revenue Code that will code Puerto Rico, as USA territory,
as a foreign country so it can continue to be the
"American-Foreign" offshore tax haven for multinational corporations
and Corporate Welfare. This bill will scam the US Treasury for billions of
Puerto Rico is right at the center of this storm.
Our US Territory is their top choice for corporate money laundering. The people
of Puerto Rico have been led to believe these corporate tax breaks are the only
solution to our stagnant economy. However, these tax breaks have been around
for over 60 years and we still continue with high unemployment and serious
social problems which have escalated in high crime statistics, comparable to a
I believe these tax breaks have contributed directly or indirectly to these problems.
The proposed amendment does not provide a SPECIFIC
requirement to create jobs with the repatriated profits. Without this
provision, the companies will use the funds to increase dividends and buy back
their battered stocks, like they did in 2004. The junket of business and political
leaders from PR coming to DC will only create jobs in hotels and restaurants
here, but will not convince the staff in Congress and US Treasury, who know how
the companies make job and investment decisions.
The Bill is a major strategic blunder. Puerto Rico Governor Fortuño should have proposed the creation in PR of a federal island-wide enterprise zone, and the full incorporation of PR into the federal tax system. A federal enterprise zone in PR will provide tax incentives linked to job creation that Congress and the US Treasury can support.
Seeking a tax holiday ONLY for PR will contribute to the negative image that PR has in Congress and the US Treasury as an opportunistic tax haven who only cares about itself. For Fortuño, who portrays himself as a republican leader with national aspirations, supporting a tax haven only for PR is a major step back.
The 2nd section of the bill HR3020 is the key:
US Treasury and Congressional tax experts will
instantly recognize HR3020 as a blatant attempt to reinstate the Section 936
federal tax exemption that existed for "possessions corporations"
before 2006, but this time masked as a change in section 933.
You may also want to check other articles on Corporate Welfare in my blog: http://themjreport.blogspot.com/p/corporate-welfare.html