Diversity Think Tank shall renew a vibrant advocacy for Puerto Rico educating the public to request that Congress revisit Section 936 tax policy. The Diversity Think Tank will also focus on much needed social services, including advocating for a special provision to change the minimum income requirements for Puerto Ricans to qualify for certain federal programs. Puerto Ricans earn far less than people on the mainland; therefore, it is unconscionable that U.S. Federal income poverty guideline requirements are the same in Puerto Rico as the mainland United States.
A very important tax break enacted in 1976 by the U.S. Congress, allowed U.S. manufacturing companies to avoid corporate income taxes on profits made in U.S. territories. For that reason, several U.S. corporations, especially pharmaceutical companies arrived to do big business in Puerto Rico. The name of the tax exemption for Puerto Rico is called: The Possession Tax Credit, Section 936. However, in 1996, Congress with tax reform advocates pressured President Bill Clinton to end Section 936. President Clinton requested a 10 year phase out and by 2006 the reversal of fortune started in Puerto Rico.
Therefore, after decades of vibrant growth of businesses, GDP, disposable income and Puerto Rico’s increased government spending on education and good social programs; the end of Section 936 in 2006 triggered the tragic economic decline now manifested on the beautiful island of Puerto Rico with its kind people. Plant closures and mass job losses were followed by a deep recession while unemployment in Puerto Rico continued to rise steadily. Additionally, with a much smaller tax base, the Puerto Rican government needed to borrow to stay afloat and fell victim to numerous scams by mainland Wall Street bankers that like a disease infected our entire globe (not only Puerto Rico) and caused a global recession rescued by President Obama. Finally, adding to those insurmountable financial constraints resulting from incoherent U.S. tax policy and banking scams with racist undertones, hurricane Maria caused further financial ruin in 2017 and now COVID in 2020 has resulted in more devastation to Puerto Rico’s economy.