What Next? Let’s ReStart!
As we move to a possible head-on collision with the federal fiscal-control board or Junta, Puerto Rico needs to assure that through credible voices it is heard with regard to the difficult determinations this group of seven will make. The future of Puerto Rico is at stake.
In the Puerto Rico Oversight, Management & Economic Stability Act, or Promesa legislation, the black hole is economic development, which nonetheless will be paramount if Puerto Rico is going to grow out of its present malaise.
I am not aware of any detailed economic plan being considered, which is disturbing when we are now entering our 11th year of recession.
The private sector will ultimately need to be the motor of any economic growth. In my estimation, Puerto Rico needs to significantly lower income taxes to let the private sector redirect resources toward growth to accomplish this. Our tax base also needs to be amplified. Too few pay too much. Too many pay little or nothing. And investment capital has to be attracted,from both the outside and from locals. Without ample investments our economy simply will not grow.
“The private sector
will ultimately need
to be the motor of any
These issues have been successfully attended to in other countries. In Puerto Rico’s unique case, I submit that Boricuas from the diaspora should be incentivized to return by offering them a 25% maximum tax rate for 10 years. If successfully done this would increase our tax base significantly to offer all taxpayers a reduced top rate of 25% over a five-year period.
Capital gains taxes would be eliminated for 10 years on local investment. These new residents would bring along their capital, badly needed here and be put to work creating jobs and more wealth.
The result may have a major impact on helping us reverse the deadly effect of present demographics.I have presented a couple of tax-related ideas,out of an arsenal of possibilities, to help ReStart our economy. My strong conviction is that Puerto Rico must utilize its fiscal autonomy to the fullest as a powerful economic tool.
If a well-structured economic plan is presented to the Junta as the solution to our distress, I believe it will be welcomed and the Junta will incorporate it into its own agenda for Puerto Rico.
After all, the measurement of the Junta’s success will be Puerto Rico’s own,five years hence.
From the editors: The above column by Caribbean Business Publisher Miguel Ferrer marks the beginning of a social initiative called ReStart—as in restart your computers—intended to push a positive mindset among all of Puerto Rico’s people.Tony Award-winning Lin Manuel Miranda, who is Puerto Rican, states in his contribution to the campaign:“Puerto Rico is made of the smartest people I know. It is time for us to decide who we are.”—So true. On a separate note, Executive Editor Philipe Schoene Roura, who is traveling to Philadelphia later this week for Special Coverage of the Democratic Convention, which kicks off on July 25, returns with a column on July 28.