[Congressional Record Volume 144, Number 142 (Saturday, October 10, 1998)]
[Extensions of Remarks]
[Pages E2020-E2021]
From the Congressional Record Online through the Government Publishing Office [www.gpo.gov]


REGARDING A BILL REQUESTING THE SECRETARY OF THE TREASURY TO PREPARE A 
   REPORT ON THE FINANCIAL STATUS OF THE COMMONWEALTH OF PUERTO RICO

                                 ______
                                 

                           HON. PHIL ENGLISH

                            of pennsylvania

                    in the house of representatives

                        Friday, October 9, 1998

  Mr. ENGLISH of Pennsylvania. Mr. Speaker, today I am introducing a 
bill that would require the Secretary of the Treasury to prepare a 
report on the current Federal program costs, and Federal revenues, 
attributable to the Commonwealth of Puerto Rico and on other matters 
relating to the taxation of residents of the Commonwealth of Puerto 
Rico.
  Regardless of when or how Congress determines the ultimate political 
status of Puerto Rico, there are urgent issues of Federal fiscal policy 
relating to the present commonwealth system in Puerto Rico that will 
not wait. Congress must address issues of fiscal equity and 
responsibility for the 3.8 million U.S. citizens of Puerto Rico, 
without being held hostage to the on-going political status debate.
  At current levels of Federal spending in Puerto Rico, now 
approximately $10 billion annually, U.S. taxpayer dollars will be used 
to subsidize the current commonwealth system in Puerto Rico at a cost 
in excess of $100 billion over the next ten years. Yet, there are no 
plans or even proposals that Congress can consider with respect to 
introduction of Federal income tax and other Federal taxes from which 
Puerto Rico was temporarily exempted earlier in this century.
  Congress never intended to make Puerto Rico a permanent haven from 
Federal taxation. If the commonwealth system of local government under 
Federal powers is to continue, even the current spending levels require 
Congress to consider imposition of some part or all of those Federal 
taxes that currently are not collected in Puerto Rico.

[[Page E2021]]

  In simple fairness to the taxpayers of the nation as a whole, 
continued subsidization of the current commonwealth relationship will 
require Congress to consider issues of fiscal equity and responsibility 
for Puerto Rico. Ultimately, subsidization must end one way or the 
other, and phasing in Federal taxes should lead to a lower overall tax 
rate for the U.S. citizens of Puerto Rico as full integration into the 
national economic and fiscal system are achieved and currently very 
high local taxes are reduced.
  For now, the purpose of this measure is simply to ensure that 
Congress will be prepared to address these issues in an informed 
manner. We need to begin planning now rather than waiting until the 
urgent need for a plan arises. This provision will require the 
Secretary of Treasury to provide Congress with a recommended course of 
action in the event that introduction of Federal taxes not currently 
collected by the IRS is determined by Congress to be in the best 
interests of Puerto Rico and the nation as a whole.

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