Puerto Rico in economic limbo as legislators reject tax plan

[Little Tich]

Source: Yahoo! News / AP

SAN JUAN, Puerto Rico (AP) — Gov. Alejandro Garcia Padilla pledged Thursday to negotiate with legislators after they voted down an overhaul of Puerto Rico's tax system, raising concerns about the U.S. territory's economic future. But he warned he would act independently if needed to rectify the government's financial problems.

"Puerto Rico is facing one of the biggest fiscal and economic crisis in its modern history," Garcia said in his yearly televised commonwealth address. "I will not stand by idly. The island can no longer bear the uncertainty of inaction. With you, or in spite of some of you, this island will rise."

The address came just hours after legislators rejected Garcia's call for a 16 percent value-added tax, and then voted 28-22 against an alternative way to raise revenue, including a 13 percent goods-and-services tax following some nine hours of debate and weeks of negotiations.

Garcia said he would take immediate action to reduce the government's costs, restructure the Treasury Department to help cut down on rampant tax evasion and push for Puerto Rico's right to file for bankruptcy under Chapter 9. He said he plans to create two working groups to find ways to boost liquidity and help reorganize the government to ensure the continuity of essential services.


Read more: http://news.yahoo.com/puerto-rico-economic-limbo-legislators-reject-tax-plan-123908574.html

[Kip Humphrey]

1. how about sovereignty followed by a debt jubilee followed by a 20% foreign ownership real estate

tax - except for foreign businesses that hire 50 or more PR citizens at a starting minimum wage of 500% over the new national minimum income provided all Puerto Rican citizens.

[MADem]

2. Don't hold your breath for that to happen.

The last vote three years ago was sixty one percent voted for statehood, but between the way the ballot was worded and exhortations to leave questions blank, we're still in Territory territory.

[Jesus Malverde]

3. Tax Bacardi

Bacardi, a non-U.S. company based in Bermuda, is currently the leading beneficiary of rum cover-over subsidies, including tens of millions of dollars a year in marketing assistance from the Puerto Rico government. But Bacardi is losing market share to Diageo's Captain Morgan rum brand and that competition will continue when our company moves to the U.S. Virgin Islands, which is building the world's most efficient and environmentally sound rum distillery.

The Conservation Trust of Puerto Rico, a group that gets its funding from rum cover-over revenue and has chosen to overlook Bacardi's troubling environmental record, has said it is working closely with "rum-makers including Bacardi and Serralles to get Congress to consider legislation that would overturn the Virgin Islands initiative.&quot 1)

We know that in recent months, Bacardi officials and lobbyists have visited numerous Congressional leaders. They also have participated in meetings with Puerto Rico officials to oppose the U.S. Virgin Islands initiative.

Destileria Serralles executives also visited key Congressional offices to lobby against the agreement and he has recently made the outlandish claim that the United States may risk World Trade Organization sanctions in connection with the agreement.(2)

We have been informed reliably that Bacardi is a backer of the National Puerto Rican Coalition (NPRC), the leading critic of the U.S. Virgin Islands initiative, and recently orchestrated a sham poll announced by the NPRC alleging strong opposition among Puerto Ricans in Florida to the U.S. Virgin Islands initiative.

The National Puerto Rican Coalition has been the loudest front group in the anti-U.S. Virgin Islands initiative campaign, urging the Hispanic community, both in Puerto Rico and throughout the U.S., to boycott Diageo goods.

The National Black Chamber of Commerce
and the Florida Black Chamber of Commerce have raised the question of why Florida Senators and Senate candidates are intervening in a local economic dispute between Puerto Rico and the U.S. Virgin Islands.(3) In our opinion the answer lies in the fact that the most powerful Cuban rum-producing family in Florida is engaged in this local dispute and lobbying Florida politicians to overturn the U.S. Virgin Islands agreement for its own commercial ends.

http://www.prnewswire.com/news-releases/bacardi-worlds-largest-recipient-of-public-rum-subsidies-leads-hidden-campaign-to-drive-rum-competitor-out-of-the-united-states-and-destroy-the-economy-of-the-us-virgin-islands-85095917.html

[AngryAmish]

4. Puerto Ruco needs her independence

She is being killed by the strong dollar.

[damyank913]

5. Please explain.

The dollar is Puerto Rico's currency.

[AngryAmish]

6. PR is in enormous debt

Her industry is not competitive. A way to make your goods and services competitive is to devalue your currency. PR can't, they are tied to the strong dollar (and will only get stronger. The US is not in a debt crisis and trade deficit is disappearing with petroleum exports).

So Puerto Ricans have to import everything. And pay with USD.

Kinda how a strong euro screws over Greece.

So, the Congress has to pass a bill giving PR her independence. And allowing all PR debt now dollar denominated to be denominated in Puero Rican Dollar. Wall Street will scream, buck let them. Then run the printing presses, pay off the debt.

[Guy Whitey Corngood]

7. I know. We're so fucked over there. We're also going through

a massive "brain drain". Many people who I went to school with and are professionals now, are leaving in droves. These are people who would've never imagined leaving. I'd lived through some ups and downs. But I've never seen it so bad.

[damyank913]

8. If you devalue your currency; and you import everything...

...you'll need more pesos, drachmas, francs to buy what you need. Isn't that called inflation. That seems like a recipe for disaster.