Puerto Rico is still drowning from Hurricane Maria but it’s already facing its next crisis — a U.S. tax reform bill that island officials fear will devastate the economy.
Puerto Rico Gov. Ricardo Rosselló and Lt. Gov. Luis Rivera Marín will make a final plea on Wednesday to Republican officials, asking them to exempt the U.S. territory from a 20 percent excise tax on goods that American companies import from their overseas subsidiaries.
The measure in the GOP tax bill is designed to stop American companies from avoiding taxes by shifting profits overseas. But it would also apply to Puerto Rico because the island is treated as both a foreign and domestic entity under the U.S. tax code.
It’s a hit that Puerto Rico’s elected officials say the island’s economy cannot take.
“If the U.S. Congress ignores our situation and gives us this mortal blow to our economy, the immediate and direct effect will be Puerto Ricans boarding airplanes,” Rivera Marín told the Miami Herald.
Puerto Rico already was struggling through a deep recession before hurricanes Irma and Maria hit in September. The island’s unemployment rate hovered around 10 percent and the country was $72 billion in debt. Since the storms, thousands of Puerto Ricans have lost their jobs as businesses remain without power and unable to reopen.
Rivera Marín warned that the tax could wipe out the island’s manufacturing sector and a third of the government’s tax revenue, sending thousands more families fleeing to Florida and New York.