Monday, April 6, 2015

PUERTO RICO's despicable role as a Foreign Offshore TAX SHELTER under Section 933


I am a former Senator from Puerto Rico and have been very involved for many years against the issue of tax sparing and the US Territory of Puerto Rico's role as an offshore tax shelter.


A powerful force made up by Corporations, their lobbyists, and greedy politicians, are pushing to have the US Territory of Puerto Rico kept coded as a foreign country under Section 933 so they do not pay taxes and can continue to scam the US Treasury and the American Tax Payer to the tune of a Trillions of $$ plus a year.

Puerto Rico, a US Territory of the US, with US citizens for over 100 years is the worst victim of this IRS Offshore Tax Scam. 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 have created IRS Codes that define Puerto Rico as a foreign country for their tax evasion purposes. CFC (Controlled Foreign Corporations) does not mean they are foreign, it means Puerto Rico is foreign! This is a legal violation of the US Constitution Territorial Clause.

Puerto Rico and Puerto Ricans are 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. The GAO has reported these same results in a recent study.

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 of Puerto Rico start 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.

In cohorts with interested sectors in the island, including Corporate lobbyists, the CFC's, the local parties, workers unions, etc., lobby Congress to get 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 multinational corporations and Corporate Welfare. This bill will scam the US Treasury for trillions of dollars.

THIS IS A SCAM! OffshoreTax benefits do not help the US economy and do not create jobs for Americans. This scam has been preventing the US Citizens of Puerto Rico from achieving statehood, it throws the burden of supporting the Nation to the US Taxpayer, and is the main reason for the crisis in the US economy!

We need and appreciate your support. Please contact the US Finance Committee before April 15th, and support our position that Puerto Rico not be coded as foreign and not be used as an offshore tax shelter to scam the US taxpayer. Please ask to be included in the record for their discussion on US TAX REFORM.
Finance Committee Contact: 202-224-4515