$6 BILLION ! WOW !
The Controlled Foreign Corporations (CFC's) are supposedly US companies who do business in foreign countries. They pay little or no US Federal Taxes when they bring their money back to the US. But, in reality, they are worldwide investors who have the most expensive firms in DC lobbying intensively so as not to pay hardly any US Federal taxes. I believe this is one of the most important issues that hurt the US economy.
CFC’s have taken US jobs to sweatshops in third world countries, and yet get generous US tax benefits. The IRS coded the US Territory of Puerto Rico, as a foreign country, thus it's 4 millions US citizens would be "foreigners", for their tax sheltering purposes. How can you explain that one?
It is a scam to the people of the 50 states and PR, since CFC's also take positions on political issues and support candidates for elections. Strong conservatives such as Pat Buchanan are looking harshly at this situation. Fox News is now keeping an eye on a secret Obama deal for Puerto Rico that will cost billions to US taxpayers. This comes after the Government of PR supposedly “surprised industry with a $6 billion tax on foreign firms - including pharmaceutical firms without any public debate in advance”. This would make the U.S. taxpayers pay for this, and not the companies.
Ironically, it is the same PR Governor Fortuño’s Administration who is lobbying the White House and Congress to get the CFC’s a better deal. I will let your imagination figure out why. CFC's have gotten away with paying very few US taxes and no Puerto Rico taxes. Puerto Rico "hit" them with a four year decreasing 4% tax. (It goes down a point every year and is eliminated totally in four years. This represents $1,200 million the first year.)
Let's see what happens. The CFC’s political and lobbying power is so powerful that this may be compared to a David/Goliath fight.
Obama’s Secret $6 Billion Bailout for Puerto Rico?