[Congressional Record (Bound Edition), Volume 147 (2001), Part 10]
[Extensions of Remarks]
[Page 13747]
[From the U.S. Government Publishing Office, www.gpo.gov]



                ECONOMIC REVITALIZATION TAX ACT OF 2001

                                 ______
                                 

                         HON. CHARLES B. RANGEL

                              of new york

                    in the house of representatives

                        Wednesday, July 18, 2001

  Mr. RANGEL. Mr. Speaker, I have joined a number of colleagues today 
as an original co-sponsor to a very important piece of legislation, the 
Economic Revitalization Tax Act of 2001. This legislation will provide 
an incentive for U.S. companies that have international operations to 
invest in Puerto Rico, instead of in competing foreign countries, and 
to bring their profits back to the United States. Under this 
legislation, these U.S. companies will be able to lend or invest in the 
United States most of their profits from their Puerto Rico operations 
free of tax to their U.S. parents, or, in the alternative, to 
repatriate dividends with the benefit of an 85 percent dividends 
received deduction.
  This legislation is necessary to protect the over 320,000 jobs in the 
U.S. mainland that depend upon a strong Puerto Rican economy. 
Historically, economic growth in Puerto Rico has paralleled or exceeded 
that of the United States. Since 1996, however, economic growth rates 
in Puerto Rico have averaged 21 percent less than in the United States. 
The divergent paths of the U.S. and Puerto Rico economies since 1996 
would be even more dramatic were it not for the fact that Puerto Rico 
has received over $4 billion of private insurance and FEMA 
disbursements as a result of Hurricane Georges.
  Puerto Rico is a vital member of the American family. The new 
administration of Governor Sila Maria Calderon, is continuing the 
vision of a prosperous Puerto Rico originated by the legendary Luis 
Munoz Marin. She is implementing a coherent development plan that will 
make that vision a reality. Governor Calderon understands that reform 
of the Commonwealth government and its economic development policies 
are necessary for Puerto Rico's economic development. She is doing this 
in close collaboration with business and community leaders in Puerto 
Rico.
  Success in Puerto Rico requires action in Washington as well. The 
negative impact of the loss of federal tax provisions to offset Puerto 
Rico's disadvantages is becoming painfully evident. New federal tax 
incentives are a vital part of what is needed to bring Puerto Rico back 
to a dynamic economic development path.
  The U.S. citizens in Puerto Rico deserve and expect this Congress to 
join them in an effort to revitalize their economy. If we do not do 
this out of principle, we should do it out of self-interest. What is 
good for Puerto Rico is good for the United States. More and better 
jobs in Puerto Rico mean more payroll taxes paid into our Treasury and 
more jobs in the U.S. mainland.

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