Florida Republican Sen. Marco Rubio introduced a bill last week that would implement multiple tax changes in Puerto Rico after the measures were not included in a massive disaster relief bill passed late last year after Hurricane Maria.
Rubio's bill, called the Puerto Rican Empowerment Act, would implement recommendations from a bipartisan congressional task force on Puerto Rico that finished its work in late 2016. The bill includes an expansion of the child tax credit to all children in Puerto Rico, which reduces some families’ tax bill for every child they have under the age of 17. Currently, the child tax credit doesn’t apply to Puerto Rican families unless they have three children or more.
“This bill would enact critical tax provisions for Puerto Rico excluded from the recent disaster relief package, like a payroll tax holiday and expanded child tax credit, which would help alleviate the tax burden for Puerto Ricans rebuilding their lives in the aftermath of Hurricane Maria,” Rubio said in a statement.
Rubio, who introduced the legislation with Utah Republican Sen. Orrin Hatch, sparred with Puerto Rican Gov. Ricardo Rosselló after the GOP tax bill was passed late last year. Rosselló was unhappy that the bill did not include certain changes for Puerto Rican-based businesses, and sources on Capitol Hill complained that his administration focused solely on corporate tax changes at the expense of the task force's recommendations.
Juan Hernández Mayoral, who led the Puerto Rican government's Washington office under former Gov. Alejandro García Padilla, said the Rosselló administration put the task force’s proposal “in a drawer” when Rosselló took office in January 2017 because eliminating tax loopholes under the U.S. territory’s current political status doesn’t align ideologically with Rosselló’s pro-statehood position.
“I mean, anyone who knows Politics 101 had to know that this would be the perfect timing for Paul Ryan to pass his tax reform he’s been working on for 10 years, it’s nothing new,” Mayoral said in February. “It’s an example of how ideology comes first before the Puerto Rican people. The current government did not advocate for it after it had worked its way through Congress for two years.”
The bill, if passed, cuts payroll taxes for Puerto Rican workers for three years, expands the federal child tax credit and establishes a data research center in Puerto Rico to improve the availability of economic statistics in the U.S. territory. The bill also includes corresponding spending cuts to pay for the proposed changes, which could make it a tricky proposition for some Democrats to support it.
Republicans and Democrats in Florida have campaigned hard for the Puerto Rican vote since Hurricane Maria caused widespread damage in October. Rubio isn't up for reelection this year but Gov. Rick Scott and Sen. Bill Nelson have made repeated visits to the island in recent weeks as their U.S. Senate campaigns ramp up.