Six weeks after a devastating hurricane, the US Congress is preparing another hurricane for Puerto Rico. Just four days ago, on November 9, the House Ways & Means Committee approved a bill that will add a 20% tax to EVERY product that enters the US from Puerto Rico.
This bill is part of the 2017 congressional “tax reform” package.
You can read the entire bill here. The relevant section is Sec. 4303, which starts on page 397.
You can also read a summary of the bill here. Sec. 4303 is discussed on pages 6 and 7.
A delegation of Puerto Rico legislators immediately flew up to Washington, DC, to show congress how this “Puerto Rico tax reform” will further devastate the island.
Until today, the only English-language press is a small article in Caribbean Business .
The US Senate is considering an alternative “Puerto Rico tax reform” with a lower import tax of 12.5%, which is expected to pass shortly after the Thanksgiving break. But even this “tax reform” will doom the island’s economy.
“It would be devastating for Puerto Rico,” said ex-governor Anibal Acevedo-Vila.
“It would be a third hurricane for this island,” said Rodrigo Masses, president of the Industrial Association of Puerto Rico.
It would cause “the total collapse of the island’s economy,” said Fernando Montalvo, coordinator of the Puerto Rico Private Sector Coalition.
To place this in context, consider the chief exports of various US states: lobsters from Maine, coal from West Virginia and Pennsylvania, diamonds from New York. Airplane parts are the chief export of twelve states: Arizona, Arkansas, California, Connecticut, Georgia, Hawaii, Kansas, Kentucky, North Carolina, Ohio, Oklahoma and Washington.
Now imagine what would happen if the US Congress slapped an additional 20 percent tax on all lobsters, coal, diamonds and airplane parts.
An open rebellion would break out in most, if not all, of those states. The National Guard would have to mobilized; martial law would be declared. Crime, suicide and homelessness would skyrocket. Wall Street values would plummet.
Now multiply all this exponentially in Puerto Rico, where ALL products will be indentured with a 20% export tax – just six weeks after a hurricane, on an island with no electricity and a per capita income of $16,000 – half that of Mississippi, the poorest state in the US.
Oh, I almost forgot. The island also has a Financial Control Board screaming PAY ME.
Mercenary capitalism is nothing new in Puerto Rico. The Naomi Klein “shock doctrine” has been applied there for well over 100 years.
After Hurricane San Ciriaco, the worst hurricane of the entire 19th century, flattened Puerto Rico in 1899, the US de-valued the island’s monetary currency by 40% in 1900. The very next year (1901) they inflicted the Hollander Act: a steep property tax on all Puerto Rican farmers.
This was not intended as hurricane relief. It was a calculated and efficient land grab – and sure enough, by 1930, eighty percent of Puerto Rico’s farmland was owned by US banking syndicates.
Now in the 21st century, nothing much has changed. Puerto Rico continues to stare into the rifle barrel of the US capitalist system.
The combination of the Jones Act, which inflates all Puerto Rico import prices by 20%, and now this “Puerto Rico tax reform,” which taxes all Puerto Rican exports by 20%, will surely doom any effort at economic recovery in Puerto Rico.
A Century of Second-Class Citizenship
In view of the human devastation of Hurricane Maria, this looming economic implosion is both frightening and saddening. After a century of citizenship, Puerto Ricans have little to show for it.
After one hundred years of citizenship, Puerto Ricans enjoy the media images of the American dream and the underside of the US Constitution. They are free to be poor, under-educated and unemployed; free to be invisible and unheard; free to lose their homes to Wall Street; free to flee the island in utter desperation, as hundreds of thousands have done in recent years.
Puerto Ricans are being blown by one hurricane after another. The latest one is a 20 percent tax on all their products, six weeks after a hurricane, thanks to the US Congress.
For a history of the War Against All Puerto Ricans, read the book…
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