Saturday, November 9, 2013

CFC'S ARE TO BLAME FOR PUERTO RICO'S FINANCIAL WOES

About MJR
Miriam J. Ramirez MD 





The reason for the sad financial situation of Puerto Rico is its' use as a Controlled Foreign Corporations (CFC's) Offshore Tax Shelter. 
Puerto Rico a US Territory with US citizens for over 100 years is the largest victim of Corporate Greed. Greedy politicians in Puerto Rico, a US Territory of American citizens, in alliance with interested sectors in the island, including corporate lobbyists, CFC's, the local opposition parties, workers unions, local Banks, etc. have lobbied Congress for decades to obtain tax exempt privileges for US Corporations who do business in Puerto Rico.

This has consisted in obtaining legislation that created IRS Codes that define Puerto Rico as a foreign country for corporate tax benefit purposes. CFC (Controlled Foreign Corporations) does not mean they are foreign, it means Puerto Rico is classified as a foreign country! This is a violation to the US Constitution's Territorial Clause and our rights as US Citizens. 

Puerto Rico is right at the center of this storm. Our US Territory is their top choice for corporate money laundering. Many in 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 war zone. It has also contributed to the economic debacle hitting the US taxpayer and workers, by taking jobs away from the US, increasing unemployment and then obtaining tax benefits to bring the money home under the false pretense of helping the US economy.

Over the decades, this has not resulted in benefits for our island or our people. It has created a filthy rich governing elite class which has enjoyed these privileges, while the rest of the 3.5 millions of Puerto Ricans live under the US poverty standards and with an unemployment rate of over 18%.

3.5 million US citizens live in Puerto Rico and 4.5 million have already opted to abandon ship and relocate to the other States of the Union, the most recent ones, our most talented professionals.

Whenever the people put pressure for a process of self determination, millions of dollars appear out of nowhere to campaign against statehood, since it will be the death knoll for this scam. 


As we speak, the Government of Puerto Rico, a US Territory of American citizens, in a shameful historical move, in cohorts with interested sectors in the island, including Corporate lobbyists, CFC's, the local opposition party, workers unions, etc., lobby Congress for a new amendment H.R.3020, to the Federal Internal Revenue Code which will give them more tax sparing benefits and continue to code Puerto Rico, a USA territory, as a foreign country so it can continue to be the "American-Foreign" offshore tax haven for multinationalcorporations and Corporate Welfare


This bill will scam the US Treasury for billions of dollars. It will not help the US economy, and will not create jobs for Americans. Not in Puerto Rico and not in the 50 states.

The proposed legislation 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 going to DC will only move the economy in hotels and restaurants in DC while they visit, but hopefully will not convince the staff in Congress and US Treasury, who know how the companies make job and investment decisions.

Allowing for benefits for offshore tax shelters are a major strategic blunder. Puerto Rico should propose 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.