The Obama administration is eying a secretive tax deal critics charge is an indirect bailout for Puerto Rico to the tune of billions of taxpayer dollars.
The U.S. territory, desperate for revenues in the midst of the recession, surprised industry with a $6 billion tax on foreign firms – including a significant bloc of U.S. pharmaceutical firms – late October in a rare weekend legislative session without any public debate in advance.
But now U.S. taxpayers, not the firms, could end up footing at least a significant chunk of the bill.
Gov. Luis Fortuño signed the new tax into law Oct. 25. That day, the Washington, D.C.-based whiteshoe law firm Steptoe & Johnson issued him a legal brief arguing U.S. firms should receive money
from the U.S. government to offset the Puerto Rico tax increase, which Fortuño sent to the Internal Revenue Service, where a decision is pending.
The international tax law in question is complicated, but experts agree the tax, and the request, are an unusual use of portions of the tax code intended to avoid double taxation on U.S. firms in countries that have reciprocity treaties with the U.S.
“We would call it creative,” said James Hines, an expert on international tax issues and the L. Hart Wright Collegiate Professor of Law at the University of Michigan Law School. “It’s an unusual tax for sure.”
It’s an “indirect bailout,” said Dan Mitchell, an international tax expert and senior fellow at the Cato Institute.
Factions within the IRS are fighting over the decision.
“The IRS is very careful about giving away U.S. taxpayer dollars,” said Roberto Monserrate, assistant executive vice president for the Puerto Rico Manufacturers Association. “This is big money we’re talking about.”
Fortuño promised worried businesses the matter would be decided by Dec. 24 but the IRS had not made up its mind late Monday.
The IRS could deny the request by deeming the tax increase a “soak up” tax designed to prey only on firms that could offset the increase with tax credits from the U.S. government.
Hines explained the credits are different from how state tax increases are treated, though Puerto Rico is an American territory and receives federal funding.
“It’s a difference, but it’s only a difference of degree,” he said. Taxes paid by U.S. firms to U.S. states can be subtracted from the income level by which those firms are taxed by the federal government. For instance, a firm with $1 million in income that paid $100,000 in state taxes would be taxed by the federal government for $900,000 worth of income.
In this case, some firms could receive a dollar-for-dollar credit for the increase in Puerto Rico taxes. For instance, a firm with $1 million in income that paid $100,000 in the new Puerto Rican tax would have its U.S. tax burden reduced by $100,000.
Monserrate said his organization estimated that if international firms with subsidiaries in Puerto Rico did not change their business structure to additionally benefit from the credit they could offset $3.5 billion of the $6 billion tax.
Businesses are already racing to take advantage of the credits and otherwise shield themselves from the surprise liability.
The tax increase has roiled relations between the Puerto Rican government and the sizable bloc of international businesses which house subsidiaries there.
PLANO, Texas, Jan. 10, 2011 /PRNewswire/ — The Tostitos brand, in partnership with the USO, today revealed surprise reunions with loved ones for U.S. troops live on field during halftime of the Tostitos BCS National Championship Game. The reunited troops played along side former college football all-stars in the recent Tostitos Connect to Home Bowl, which took place at Joint Base Balad in Iraq over the holidays. The one-of-a-kind college football bowl game experience was part of a series of activities led by Tostitos, a flagship brand of PepsiCo’s Frito-Lay division, and the USO to honor and celebrate U.S. military heroes. The on-field reunions also marked the kick-off to the Tostitos “Reunite America” campaign, a program that will foster consumer-requested reunions of all kinds nationwide during 2011.
Moments before the surprise reunions took place, family members of four Tostitos Connect to Home Bowl military players were recognized on field for the sacrifices they make on behalf of the country each and every day. Then, in a dramatic and emotionally charged moment, from behind an oversized banner emerged their loved ones – the troops serving overseas who had made the more than 7,500 mile journey to reunite with their families in person.
The Best Surprise A Kid Could Get
Among those reunited were:
* SSG Alton Day, U.S. Army, Elizabeth, N.C., his wife Gwendalyn (Gwen), sons Alton, Jr. (age 14) and Aydan (age 2), and daughters Alexandria (age 12) and Alannah (age 5)
* SPC Danyul Davis, U.S. Army, Houston, Texas, his wife Jalexus, son Jai (age 1) and brothers Jeremy Michael Powell and Guy DeJohn Jackson
* Sgt Louis Davis, U.S. Army, Ft. Bragg, N.C., his wife Stephanie, daughter Zaiyah (age 3), mom Linda S. David and sister Simona R. Green
* PO1 Terry Eady, U.S. Navy, Ocilla, Ga., his daughter TeOndra (age 9), son Terrvon (age 12) and cousin Henry Leroy Fisher, Jr.
Wait for it…~I JUST heard a known critter in Megyn Kelly’s last hour, & this was his reasoning we need a proposed law: Jared was a right-wing nut because he did not believe in paper currency. Let me repeat that : The shooter is a right-winger because he believes in gold & silver! ~JP
Pima County Sheriff Clarence Dupnik, Political speech at the press briefing following the shooting–Another ploy to silence conservatives By Paul Ibbetson
The recent shooting in Tucson, Arizona, that critically injured Democratic Representative Gabrielle Giffords as well as killing six other innocent citizens brings the nation again to attempting to find reasons where they are least likely to be found. At this time authorities are still discovering many of the details; however, it has been reported that the shooter in the incident, Jared Lee Loughner, was a mentally unstable individual.
In almost all cases that involve the taking of an innocent life, the quest to find the answers as to why such atrocities take place is never adequately found. This comes in part because there is no answer for loved ones being prematurely taken from this earth that can ease the pain for those that remain. We all know and have grudgingly come to accept the nature cycle of life and the shooting in Arizona violates all that we hold acceptable when it comes to death. Unfortunately, the case of the Arizona shootings is at risk of being misdirected from honoring the dead and helping to heal the injured to promoting political agendas based on a false premise.
When I heard Pima County Sheriff Clarence Dupnik start a political speech at the press briefing following the shooting, I could see the writing on the wall, “Conservatives need to shut up.”
Having spoken to the media about criminal matters as a former law enforcement officer, I perceive Dupnik’s personal attack on those in radio and television as nothing short of bizarre. The links he drew between bigotry, national vitriol and this particular incident appeared politically motivated and makes him sound like a liberal no matter where his true affiliations stand. He is right about one thing: free speech does have consequences, but not the consequences the sheriff was trying to convey.
The founding fathers supported free speech because they knew that through standing up and saying, “I don’t agree,” and “this is not right,” and other words often spoken with great passion, that this country might break free from its shackles. The need for such free debate with all its emotion is still needed today if we hope to deny those that wish totalitarian rule back into this country.
The problem Sheriff Dupnik suffers from at best is that he has confused peaceful, passionate opposition with violence. He has failed to separate the actions of a nut with a gun from those of peaceful Americans that are fed up with the government and want to take back the reins. The American people are not acting like bigots, criminals or killers when they demand that the government exercise the people’s will with the power voters have temporarily given it. From Dupnik’s lips to the computer keyboards of the radical left, the demands for conservatives to be silent have begun.
In my morning e-mail inbox the usual daily assortment of angry liberal messages had distinct focus this week thanks to Sheriff Dupnik. The demands that I stop talking and writing about political issues included a laundry list of forbidden topics as is always the case, but this week they were unified in that my silence would now “stop the hate as seen in Arizona,” and “save lives.” Please. I was quick to give a physical address of where they could send their requests. Hint: it’s a place warmer than Arizona.
~JP interruption–So does this mean we will shut up the likes of Rep. Raul Grijalva or the instigator in getting La Raza etal riled up, Congressman Luis Gutierrez And this is representative of a much larger contingency of left wing radicals, the list being too long but shown by typing in any radical’s name in our search, the socialists, MSM, Soros and on & on…Is this a law exclusive to conservatives? Somehow they will make it that way if we allow it. ~JP
Violence like what took place in this shooting incident is unacceptable, period. However, attempting to silence groups because of a single individual who might be associated, or is fictitiously associated, as a fringe member is the sorriest of Saul-Alinsky-style political maneuvers.
Do Christians stop teaching the word of God because there is a rogue in Westboro Baptist Church running around preaching hate? Of course not, and nor should they.
Ann Coulter brilliantly documented that it has been a liberal behind all the assassinations of our American presidents throughout history. Does this mean that all liberals are guilty of mixing vitriol and violence, including murder, in their quests for political victory? Even more importantly, should all liberals just shut up for fear that someone nuttier then them may grab a gun and start shooting people? The answer is no to both questions.
I say this with full knowledge that in time the Arizona shooter Jared Lee Loughner is just as apt to be found a liberal as he is to be found a Tea Party attendee.
~I JUST heard a known critter in Megyn Kelly’s last hour, & this was his reasoning we need a proposed law: Jared was a right-wing nut because he did not believe in paper currency. Let me repeat that : The shooter is a right-winger because he believes in gold & silver! If & when the video comes online I will add it here ~JP
When it comes to Arizona’s problems such as an unsecured border and the catastrophic financial burden illegal aliens place on the state and nation, much can and should be discussed in the future. The thing in this case is that the border, illegal aliens, gun ownership, the Tea Party, politically zealous sheriffs, and Sarah Palin are not the real issue.
The relevant issue is that a mentally deranged person killed innocent people and there is now tremendous pain and suffering in Tucson, Arizona and the entire nation. The country’s “do’s and don’ts” list must be constructed with more thought than that of Sheriff Dupnik.
The biggest tragedy now would be to focus on imaginary foes and minimize what has truly been lost.
Naturally Newsweek needs to sack this nasty…I refuse to go to or link from Newsweek, so I went to an ally,weaselzippers.us So you can see what a complete ___ Alter is! Seems he takes the Rahm Philosphy to heart. Never let an opportunity… Oh, wait a minute that would indicate he had one.~JP
Can Hardly Contain His Excitement Over Ways Obama Can Profit Politicly From Giffords’ Shooting…
(Newsweek) — President Obama is off to a good start in his handling of what the networks are now calling “The Tragedy in Tucson.” The moment of silence he asked for on Monday at 11 a.m. — resonant for older Americans of the exact hour on November 11 each year that the World War I Armistice was once observed — is an appropriate expression of what we need right now: Less Noise.
But silence will not be enough. This horrific event offers the president a chance to show leadership qualities that he’s inexplicably hidden away in some blind trust. The shootings and the resulting debate over the climate of incivility play to his strengths as a calm and rational leader. Just as Bill Clinton’s response to the 1995 Oklahoma City bombings helped him recover from his defeat in the 1994 midterms, so this episode may help Obama change — at least in the short term–the trajectory of American politics.
..Whether or not he attends the funerals for the Tucson victims, Obama’s big chance to lead will come in his State of the Union address on January 25. He can both to speak to the moment thematically and confront the substantive concerns raised by the tragedy.
Conservatives like to argue that these are isolated incidents carried out by lunatics and therefore carry no big lessons (unless the perpetrator is Muslim, in which case it’s terrorism); liberals view them as opportunities to address various social ills. Obama is in the latter category and should act accordingly. “You never want a serious crisis to go to waste,” Rahm Emanuel famously said in 2008. The same goes for a shooting spree that gravely wounds a beloved congresswoman.