[Congressional Record Volume 142, Number 72 (Tuesday, May 21, 1996)]
[House]
[Page H5304]
From the Congressional Record Online through the Government Publishing Office [www.gpo.gov]




 WAGE-BASED TAX CREDIT NEEDED TO STIMULATE JOB CREATION IN PUERTO RICO

  The SPEAKER pro tempore. Under the Speaker's announced policy of May 
12, 1995, the gentleman from Puerto Rico [Mr. Romero-Barcelo] is 
recognized during morning business for 5 minutes.
  Mr. ROMERO-BARCELO. Mr. Speaker, last week the House Ways and Means 
Committee favorably reported the Small Business Job Protection Act of 
1996. This act is designed to provide businesses with new tax breaks 
and is using the repeal of section 936 of the Internal Revenue Code as 
the primary revenue-raising offset for these tax breaks. And yet, while 
substantially increasing the taxes on Puerto Rican source income, the 
act provides no increase in the Federal benefits provided to the U.S. 
citizens of Puerto Rico.
  I fully agree that the income-based tax credit provided in section 
936 is to a significant extent excessive corporate welfare. In fact, I 
was perhaps the first voice to call for repealing the income-based tax 
credit and substituting it by a wage-based tax credit. Numerous 
reasonable proposals have been put forth which would eliminate the 
wasteful income-based credit while preserving a narrower, well-targeted 
wage-based credit. The wage-based credit is a cost effective way to 
make sure that tax breaks for Puerto Rican source income do indeed 
produce jobs in Puerto Rico.
  While the 3,800,000 people of Puerto Rico are U.S. citizens, we have, 
nonetheless, been partially or wholly excluded from participation in 
many important Federal programs. According to the Congressional Budget 
Office, if Puerto Rico were treated as a State, in Medicaid alone we 
would get more than $1 billion per year. And now, even though taxes on 
Puerto Rican source income are to be drastically increased, by $4.9 
billion in 8 years, we are being provided no additional funds for 
Medicaid. Are the health and lives of the 3,800,000 U.S. citizens in 
Puerto Rico worth less than the health and lives of our fellow citizens 
in the 50 States?
  Fairness dictates that increased taxes on Puerto Rican source income 
be used for the benefit of the people of Puerto Rico. It is 
preposterous, indeed outrageous, and unfair that tax revenues collected 
on income earned in the Nation's poorest jurisdiction, Puerto Rico, be 
used to subsidize tax-credits for small businesses in the 50 States of 
the Union, the poorest of which has more than double the per capital 
personal income of Puerto Rico.
  Puerto Rico has more than twice the unemployment of any State and 
needs and deserves a new wage-based tax credit to stimulate creation of 
new jobs. Puerto Rico also needs increased participation in Medicaid. 
Please join with the President, the Governor, and me in supporting 
these changes for the benefit of the disenfranchised U.S. citizens of 
Puerto Rico.
  Mr. Speaker, we are not aliens, we are not illegal residents, we are 
U.S. citizens. Fairness dictates that increased taxes on Puerto Rican-
source income be also used for the benefit of the people of Puerto 
Rico. It is preposterous, indeed outrageous and unfair, that tax 
revenues collected on income earned in the Nation's poorest 
jurisdiction, Puerto Rico, be used to subsidize tax credits for small 
businesses in the 50 States of the Union, the poorest of which has more 
than doubled the per capita personal income of Puerto Rico.
  Puerto Rico has more than twice the unemployment of any State and 
needs and deserves a new wage-based tax credit to stimulate the 
creation of new jobs. Puerto Rico needs increased participation in 
Medicaid.
  Please join with the President, the Governor, and myself in 
supporting these changes for the benefit of the disenfranchised U.S. 
citizens of Puerto Rico. Do not allow the poorest jurisdiction in the 
Nation to be used for subsidizing the tax cuts for small businesses for 
the 50 States. That is indeed unfair. This is indeed unjust.
  Mr. Speaker, I formally submit that sufficient thought has not been 
given to this proposal. The tax cuts for the small businesses, I 
repeat, very good, we support them, but why does the poorest 
jurisdiction in the Nation have to be the principal subsidy used for 
supporting the tax cuts for all the States?

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