Does Puerto Rico need a new model for economic development?
A. We have lost over 27,000 manufacturing jobs since 1996 when the phase-out of Section 936 [of the Internal Revenue Code, which allowed American companies in Puerto Rico to send profits home without paying taxes] started. We are struggling to get another incentive. Right now manufacturing is over 40 percent of our GNP, so this is a very important sector of our economy. We need an incentive because it is very expensive to invest in Puerto Rico. Federal minimum wage and environmental laws — which we want — apply here. But that makes it difficult to compete with other destinations like Mexico, Ireland and Singapore. Q. What type of economic incentive are you proposing? A. An amendment to Section 956 of the Internal Revenue Code. What it would do is allow controlled foreign corporations, which are U.S. subsidiaries, in Puerto Rico to repatriate their profits back to the states at a lower tax rate. Right now, what controlled foreign corporations around the world do is that they never bri
