Monday, October 3, 2011

HR 3020 - To keep Puerto Rico as a foreign country and offshore tax haven for corporate tax evasion and corporate welfare.

ON HR 3020 - introduced by Pierluisi
(posted by reader)
The proposed Bill 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.

For statehood supporters, the Bill is a major strategic blunder. What Fortuno should have proposed is 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. An enterprise zone proposal will also burnish the credentials of statehood supporters in the eyes of members of Congress, who can support this idea for their own distressed districts. 

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 Fortuno, who portrays himself as a republican leader with national aspirations, supporting a tax haven only for PR is a major step back. Real statehood leaders don't get fooled into this trap.