Thursday, August 18, 2022

Under Their Eye, Again

By on June 4, 2022

“Hegel remarks somewhere that all great worldhistoric facts and personages appear, so to speak, twice. He forgot to add: the first time as tragedy, the second time as farce.” So commences the “The Eighteenth Brumaire of Louis Bonaparte” by Karl Marx. Those self-evident truths underpin current events in 2022.

Thus, when senators with the standing of Chuck Schumer (DNY) sound the alarm of a loophole bleeding his tax base, it is only a matter of time before the Internal Revenue Service (IRS) looks into alleged malfeasance pertaining to tax incentives, such as those in Puerto Rico’s Individual Investors Act, formerly Act 22 of 2012.
That law, enacted in tandem with Act 20, known as the Export Services Act, to bring investment to the island, dug too big a hole in state tax bases without justifying job creation in Puerto Rico.

“The genesis of all this, before [Hurricane] Maria, is Schumer and the New Jersey governor at the time,” a congressional source with ties to the GOP told Caribbean Business. “The issue is that you move to Puerto Rico and you stop paying federal taxes and state income tax. So, in the states, you have a state income tax; some of these folks made big holes in the budgets. There was one guy who was considering moving to Puerto Rico who was advised that it would bring too much heat to his overall tax situation.

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