For weeks, Puerto Rican Gov. Ricardo Rosselló and his associates tried to play the Washington game, meeting with politicians and lobbyists across Capitol Hill to argue against provisions in the tax overhaul bill that treat the U.S. territory like a foreign country.
But having failed to force a change, Rosselló is changing tactics now that the Republican tax overhaul bill is headed toward a final vote. Rosselló said Florida Republicans will pay at the ballot box in 2018 due to their support of a bill that he says hurts Puerto Rico in its time of need.
“Everything is on the table,” Rosselló said. “We will analyze those who turned their back on Puerto Rico, who passed a bill that goes against the spirit of the law.”
Thousands of Puerto Ricans have moved to Florida since Hurricane Maria knocked out power to the entire territory in September, and Rosselló said that the new tax bill will cause thousands more to relocate when jobs dry up on the island.
That means Puerto Ricans, who as citizens are able to vote once they become residents of a U.S. state, will be an angry political force to be reckoned with, according to Rosselló.
“To me, it’s crystal clear that because we don’t have that direct representation we’re going to have surrogate voices, whether its Puerto Ricans who moved to the U.S., or the Latino community in general,” Rosselló said. “I think there is plenty of audience to garner support for our cause.”
Rosselló is particularly irked over portions of the law that impose a 12.5 percent tax on “intangible assets” of U.S. companies abroad and a minimum of a 10 percent tax on companies’ profits abroad, meaning businesses with operations in Puerto Rico will pay higher taxes than their counterparts on the U.S. mainland. The measure in the GOP tax bill is designed to stop American companies from avoiding taxes by shifting profits overseas. But it would also apply to Puerto Rico because the island is treated as both a foreign and domestic entity under the U.S. tax code.
“Many senators and congressman came to Puerto Rico and they pledged their support. But when the time came to support Puerto Rico, they essentially bailed,” Rosselló said. “I am very disappointed with the fact the Senator (Marco) Rubio is going to be voting for this tax bill particularly when we had the opportunity to address the potentially devastating effects on Puerto Rico.”
Rubio’s office did not respond to a request for comment.
Democratic Rep. Darren Soto, the lone Puerto Rican in Congress from Florida, said the GOP tax bill will embolden Puerto Ricans in Florida to vote in 2018.
“If nothing changes (in the tax bill) it’s going to explode, there’s even more Puerto Ricans arriving in Florida,” Soto said. “They already have a bad taste in their mouth because of Trump, and this is going to add more salt to the wounds. With a million of us already here and 250,000 more arriving in the last two months, I would imagine that would be enough political pressure.”
Puerto Rico already was struggling through a deep recession before hurricanes Irma and Maria hit in September. The island’s unemployment rate hovered around 10 percent and the country was $72 billion in debt. Since the storms, thousands of Puerto Ricans have lost their jobs as businesses remain without power and unable to reopen.
Puerto Ricans could make a difference in statewide elections in Florida, where races are often decided by a few percentage points. A slew of statewide offices are on the ballot in 2018, including the governorship and a U.S. Senate seat.
“This needs to be something that’s beyond politics, it is a matter of treating U.S. citizens as second class citizens,” Rosselló said.
Miami Herald staff writer Kyra Gurney contributed to this report.
Alex Daugherty: 202-383-6049, @alextdaugherty