P.R. A.M. - P.M.

The pharmaceutical industry and other foreign enterprises will be afected by the new US tax that was recently passed and the 12% intercompany tax. These may result in thise companies moving out of the island in the next year or so, which could result in tens of thousands of well paying jobs disappearing from the economy. PR economy has not hit rock bottom yet. For every direct job lost 2-3 other indirect jobs are lost.

European , China and Rusian investments which are not subject to the same taxation may help the economy more than US investors. But either way most of those wont show up until we have good local infractructure in Place life ke roads, electricity, internet and water. Electricity work today is about restoring the old system and they are not yet working on micro grids and reliable service. Plenty of work and activity over the next 3 years restoring the services, roads and bridges but new huracane season is 8 months away which will slow down the work.

I do not expect the island economy to start coming out of the hole for at least 5 more years.

Lets not forget the debt issue, the bankruptcy court is taking forever, the economic impact requires a new budget for the island and the government is still guesing at the budget because of the storm, the exodus, the reduced work force, and many other factors.

Things are going to take a while folks

ReyP wrote:

The pharmaceutical industry and other foreign enterprises will be afected by the new US tax that was recently passed and the 12% intercompany tax.

This shows clearly how much the DC lawmakers care about PR. Hint: not a lot..

Things are going to take a while folks

You got that right. If there's no structural change and some sort of assistance coming to the island it's gonna take forever...

ReyP wrote:

The pharmaceutical industry and other foreign enterprises will be afected by the new US tax that was recently passed and the 12% intercompany tax. These may result in thise companies moving out of the island in the next year or so, which could result in tens of thousands of well paying jobs disappearing from the economy.

Don't particularly care to get into a debate about the wisdom of recent tax reform, but regardless of whether the policy is wise or not, I don't see how Rey's statement is accurate.

The tax reform reduced U.S. corporate taxes to just below the average tax rate of OECD nations; that is, because of the tax reform, U.S. corporations will pay a tax rate similar to, rather than significantly more than, that of other industrialized countries.  This means that U.S. companies will be more profitable, attracting more investment from both foreign and domestic investors.  The tax reform should spur economic growth, and early signs suggest that is happening.

It is true that a reduction in U.S. corporate tax rates makes U.S. corporations more attractive to investors than foreign corporations, including Puerto Rican corporations.  But there is nothing in the tax law that prevents a U.S. corporation from doing business in Puerto Rico, establishing offices in Puerto Rico, or hiring Puerto Ricans.  Indeed, if U.S. corporations are more profitable, we can expect to see them grow their businesses.  As above, there already is evidence that this is happening.  But though I expect to see U.S. business expansion, I don't expect U.S. companies to expand to Puerto Rico, and this has nothing to do with tax reform.

What deters business in Puerto Rico is not U.S. tax policy, but a mix of federal and PR policy, as well as decades of political cronyism, corruption and incompetence.  Add to this a byzantine regulatory burden, the failing infrastructure, much of which collapsed under the weight of Maria, a culture that eschews hard work and dedication for "manana" and a refusal to learn and speak the language of commerce and I don't see mainland businesses lining up to set up shop in Puerto Rico.

The tax reform is good for U.S. economic growth, making U,S, companies more profitable.  Whether business grows or declines in Puerto Rico is in Puerto Rico's hands.

Everyone has valid points. Yes the new tax codes will stimulate US Biz growth and that is good for PR. PR is a US territory so it needs the US to be strong and growing. Even though we were delayed due to the Maria aftermath, we are still planning to make the move and establish several companies in PR and take advantage of 20&22. Not all businesses are a good fit for this, but thank the Lord ours are.

If PR will stay the course, 20&22 (as well as the other incentives) will play a key roll in rebuilding and growth of PR. This is a Marathon not a 100 Yard dash as so many people want it to be (Instant Success). I have heard several testimonies of Act 20&22 Businesses and Individuals putting up substantial sums of money to fund relief efforts. One Act 20%22 business stroked a check for $100,000 without hesitation. I am sure, that is one of many that stepped up to the plate. I take my hat off to everyone that is helping!!!!!

So to the naysayers of the Tax Incentives, PR would NOT have these blessings, jobs created, tax revenue generated, and the current and future Investments (from the Tax Incentive Participants) in PR, if the Incentives were not started. People would STILL be leaving the Island!!

Hang on PR, we have more companies coming soon!!! PR is blessing us, we will be a blessing to PR!!!! I also know of several foreign companies also looking to set up shop in PR as well. So let us not have circumstances and others dictate our future. (For me) I will dictate my future and change or create the blessed circumstances I want to operate in. Not by someone else or bad events!!!

londonpride wrote:

https://www.youtube.com/watch?v=eVJd_iX_ERw

A different group of singers yesterday released this 7 minute music video of  Puerto Rico A.M-P.M.  "Isla Bendita"

I think the governor's wife Beatrice Rossello, PR's First Lady, was involved because her name/logo appear at the end. 

Very well done, worth watching for sure. Nostalgic at times, will evoke PR pride no doubt.

I wiped the tears from my eyes a few times during the video. It was made by Unidos por Puerto Rico and the first lady.

WarnerW wrote:

ReyP wrote:

The pharmaceutical industry and other foreign enterprises will be afected by the new US tax that was recently passed and the 12% intercompany tax. These may result in thise companies moving out of the island in the next year or so, which could result in tens of thousands of well paying jobs disappearing from the economy.

Don't particularly care to get into a debate about the wisdom of recent tax reform, but regardless of whether the policy is wise or not, I don't see how Rey's statement is accurate.

The tax reform reduced U.S. corporate taxes to just below the average tax rate of OECD nations; that is, because of the tax reform, U.S. corporations will pay a tax rate similar to, rather than significantly more than, that of other industrialized countries.  This means that U.S. companies will be more profitable, attracting more investment from both foreign and domestic investors.  The tax reform should spur economic growth, and early signs suggest that is happening.

It is true that a reduction in U.S. corporate tax rates makes U.S. corporations more attractive to investors than foreign corporations, including Puerto Rican corporations.  But there is nothing in the tax law that prevents a U.S. corporation from doing business in Puerto Rico, establishing offices in Puerto Rico, or hiring Puerto Ricans.  Indeed, if U.S. corporations are more profitable, we can expect to see them grow their businesses.  As above, there already is evidence that this is happening.  But though I expect to see U.S. business expansion, I don't expect U.S. companies to expand to Puerto Rico, and this has nothing to do with tax reform.

What deters business in Puerto Rico is not U.S. tax policy, but a mix of federal and PR policy, as well as decades of political cronyism, corruption and incompetence.  Add to this a byzantine regulatory burden, the failing infrastructure, much of which collapsed under the weight of Maria, a culture that eschews hard work and dedication for "manana" and a refusal to learn and speak the language of commerce and I don't see mainland businesses lining up to set up shop in Puerto Rico.

The tax reform is good for U.S. economic growth, making U,S, companies more profitable.  Whether business grows or declines in Puerto Rico is in Puerto Rico's hands.

Not defending or throwing against the tax bill, just saying that I expect the import tax to have an effect to the firms that export to the US mainland and as such they may not want to stay in the island. Each company will make those decisions when they look at their numbers.

True Rey

Personally I am not to excited about the tax changes. Could live with the changes if there were notable spending cuts. Trump is doing all he can to cut we're he can, but when you have an army of career politicians (not all of course but as a whole) at the Fed and State levels, that spend like drunken sailors and then gag at a gnat then swallow a camel, and don't forget No Enforced Accountability, there will be no lasting positive change.

So many fixable problems but to many voters with socialist mentalities

Not going into the bill, I think it will be good for me, but unsure until the time comes to actually do the taxes for 2018 so I will defer my opinion.

But if it raises the cost of doing business in PR, businesses will have to determine if it is worth it to stay or not. If they leave many thousand jobs in PR will disappear.

Only talking about the effect it could have on PR resident businesses. I do not want to argue anything else. Just like when that law 926 or whatever the number, resulted in an exodus of businesses.

Understood Rey. Very valid points you make as well. We shall see how it all plays out.

Looking forward to meeting you someday soon. Blessings to you and Family.

Maybe we'll go back to an agricultural society; it's the tax breaks offered by the govt that brought big businesses here, and as a result, the younger generations didn't want to farm, but go work in factories. Maybe we can be self sustaining, (but poor).

I personally don't know too much about the new tax law but when I google "new tax law effect on puerto rico" I see mainly articles that state that it's going to be bad for PR.  Only one link on the first result page states that a White House spokesperson said that the law won't hurt PR.
We'll have to wait and see but I'm not too confident. Also, when I see how slow and halfhearted the help from the USA after Maria was and still is I'm even less confident..