Op-Ed: Excluding PR from federal tax reform builds ‘economic wall’

Written by  //  November 30, 2017  //  Biz Views, Uncategorized  //  2 Comments

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Author John A. Regis, Jr. was “Donald Trump for President” 2016 campaign chairman for Puerto Rico.

The tax reform and the resulting economic development and job creation to our nation included in President Donald Trump’s campaign platform is the best we have seen in any presidential candidate in recent history.

In reviewing the tax reform legislation approved in the House this last week, Puerto Rico is not included as part of America in said legislation.

Puerto Rico must be included in the tax reform legislation with a very simple fix that would greatly benefit both the U.S. tax payers as well as the 3.6 million American citizens that live in Puerto Rico.

To include Puerto Rico in the greatest tax reform in our generation, a simple item needs to be done: On H.R. 1 — known as the Tax Cuts and Jobs Act of 2017 — Section 1 (b) at the end of the paragraph add: “and provided Section 933 is in effect, shall include the territory of Puerto Rico.”

Puerto Rico should be included in the tax reform legislation as it:

  • is fully integrated into the nation’s economy,
  • has a larger American citizen population than 25 states, and
  • contributes nearly $4 billion a year to the nation’s coffers in various types of federal taxes.

A 1992 Executive Order states that Puerto Rico should be treated administratively as any other state, as the island counts with a large number of federal employees, and a large number of American manufacturing and service corporations.

Puerto Rico also falls within the boundaries of the U.S. Customs Zone together with the other 50 states, and Puerto Rico being an American soil with American citizens should be part of MAKING AMERICA GREAT AGAIN!!!!

Economic development needed ‘more than ever’
Now, after the effects of two hurricanes, Puerto Rico needs economic development more than ever. Not including Puerto Rico in the tax reform legislation would have a larger destructive effect than any of September’s past two Category 5 hurricanes.

Not including Puerto Rico in the Tax Cuts and Jobs Act of 2017 will result in a devastating effect, in which American corporations operating in Puerto Rico for decades will have no option but to move their operations to another American jurisdiction where they can enjoy the benefits of this great tax reform.

Funds held in the island by these corporations will now have the huge incentive to move them elsewhere to create jobs and investments instead of benefiting the island.

The Financial Oversight and Management Board for Puerto Rico created by Congress has approved a fiscal plan to correct government finances and achieve a balanced budget. If Puerto Rico is not fully included in the Tax Cuts and Jobs Act, the goals and targets set under the approved fiscal plan can never be achieved.

Excluding PR from tax reform is like ‘building economic wall’
Leaving Puerto Rico out of the tax reform would be like building an economic wall around Puerto Rico similar to President Trump’s planned wall to leave illegal aliens and criminals out of our country, except that in the case of Puerto Rico we will be unfairly leaving out 9,194 square miles of American soil and 3.6 million American citizens.

IRS Section 933 provides that all Puerto Rico-based income for individual island residents is exempt from the payment of federal taxes, so Puerto Rico-based income is separate from federal taxation.

This makes for a unique tax autonomy providing for two distinct tax structures within the same territory, where the federal tax reform can be of benefit to those firms or individuals subject to federal taxation, as in the case of federal employees, individuals receiving funds from the U.S., and U.S.-based corporations located on the mainland having manufacturing or service operations in Puerto Rico, while not affecting at all Puerto Rico residents. Tax income under the Puerto Rico local tax regulations will remain untouched.

By leaving Section 933 untouched, Puerto Rico’s personal taxes will continue having the tax autonomy they have enjoyed since the late 1920s. Puerto Rico has been able to host Controlled Foreign Corporations and many other economic development aids. This will remain unchanged by the amendments we are proposing to the tax reform.

The inclusion of Puerto Rico in the Tax Cuts and Jobs Act of 2017 will correctly treat it as part of U.S soil or territory. It will allow for hundreds of U.S.-based corporations to continue operations and retain funds in Puerto Rico as they have done for dozens of years and will attract manufacturing and other corporations now elsewhere in the world to consider Puerto Rico to relocate their operations on U.S. soil or territory.

Including PR in reform puts it on level playing field
Including Puerto Rico in H.R. 1 will not provide it with a competitive advantage to attract manufacturing and commercial activity from the mainland, but at least it will place the island on a level playing field with the rest of the nation.

Although the personal tax framework under IRS-933 and the Puerto Rico Tax codes will remain unchanged for the Puerto Rico economy, the effects of the lack of application of the Tax Cuts and Job Act will result in a devastating effect on the island resulting in the loss of more than 40 percent of the island’s economy.

This will result in an insolvent and ruined condition for the Puerto Rico government as well as local businesses, of which a substantial number will result in bankruptcies and going out of business and representing further job losses.

The flow of Puerto Ricans moving to the mainland seeking employment will multiply several times the number of people leaving after the last two hurricanes in September.

For the reasons mentioned above, Puerto Rico must be part of the Tax Cuts and Jobs Act under H.R. 1. The 3.6 million American citizens living in Puerto Rico demand and deserve equal treatment with Americans living elsewhere.

The effects and benefits of the application of the greatest tax reform of our generation to include Puerto Rico is extremely beneficial to both the United States and to Puerto Rico.

We respectfully request from President Trump not to allow the building of an economic wall isolating Puerto Rico from the rest of the nation and to bring equality by fully including Puerto Rico in the Tax Cuts and Jobs Act of 2017 and to…MAKE ALL OF AMERICA GREAT AGAIN!!!

2 Comments on "Op-Ed: Excluding PR from federal tax reform builds ‘economic wall’"

  1. Buck November 30, 2017 at 6:25 AM · Reply

    Trump is a big fat liar. Permanently slashing tax for big business is taking money from poor and middle class Puerto Rican families so the richest who live elsewhere can leave a dynasty to their ingrate kids like Trump, born on 3rd base. After the Congress gets walked. he thinks he hit a home run because Russia hacked the vote.

  2. Dump Trump November 30, 2017 at 6:46 AM · Reply

    It is no accident that this island is dying but tying its future to big lies of the richest who live elsewhere is no answer. Trump and his talking points are repackaged “trickle-down” theory that failed before. When his crew is in jail for hijacking the vote with our age-old enemy, PR might have a chance, but not before.

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