Friday, April 3, 2015

Senate Finance Committee Under Pressure from CORPORATE WELFARE LOBBYISTS

Senate Finance Committee Under Pressure from CFC's to nail down Puerto Rico and Puerto Ricans forever as a Disenfranchised Offshore Tax Shelter

OPEN LETTER TO SENATE FINANCE COMMITTEE CHAIRMAN: THE HONORABLE ORRIN HATCH:

April 3, 2015

The Honorable Orrin G. Hatch
Chairman
Committee on Finance
United States Senate

We count on your support to advance our struggle to achieve equal rights for the almost 4 million disenfranchised US citizens in Puerto Rico.  I write to you at a critical moment in our Nation's history.   Your fellow citizens in Puerto Rico need you in order to be part of the final tax and spending agreement. 

This is a historic opportunity to redress an injustice that was made against the People of Puerto Rico in 1921, when Congress decided to treat Puerto Rico as a "foreign country" for tax purposes.  While Congress approved the 1921 exclusion in order to promote economic development, this commendable objective has not been achieved in almost a century. Puerto Rico continues to fall behind all the states in the Nation, mired in economic, social and demographic stagnation for more than a decade.   

Unfortunately, the 1921 tax exclusion that Congress established to help Puerto Rico has been transformed into a significant drain to the US Treasury, victim of well-documented transfer pricing abuses by the "Controlled-Foreign Corporations" (CFCs) in the Island. There is no economic or moral justification to allow a U.S. corporation to have tax savings of $22 million per employee in Puerto Rico.  

This is the right moment to draft legislation to finally include Puerto Rico in the U.S. tax code, with all the responsibilities and privileges of US citizens. This historic change can be achieved by deleting Section 933 of the Internal Revenue Code, and defining corporations incorporated in Puerto Rico as U.S. Corporations, for tax and other purposes. 

With Puerto Rico´s full inclusion in the tax code, Congress can stop transfer pricing abuses and create effective tax benefits that generate real jobs and promotes tangible investments in Puerto Rico through specific legislation that treat US citizens in the Island in a manner similar to other communities in the 50 states. There is a real opportunity to draft effective legislation for Puerto Rico that creates a direct link between each dollar of federal tax benefits to a job, similar to the Earned Income Tax Credit that have benefitted residents in the 50 states since 1975.  In addition, Federal tax benefits to generate real investments in Puerto Rico can be designed similar to the provisions in Enterprise Zone acts and the Promise Zones legislative proposals of President Obama.

Bringing back Puerto Rico as a full partner into the federal tax system would carry significant benefits to the People of Puerto Rico and the US Treasury, but are not possible without your strong commitment to carry them through to the final budget agreement.  As you know, there are formidable moneyed interests that benefit from using Puerto Rico as a tax heaven, and they would not give up the hugely inefficient tax deferral benefits without a fight. The almost 4 million disenfranchised US citizens in Puerto Rico count on your support to secure our equal rights and responsibilities.
Puerto Rico From Space

Thank you,
Miriam J. Ramirez MD


Please help us and express your support to our position to Senator Hatch. Thank you.
Sen Hatch email Contact: