Washington - Senate Democratic Majority Leader Charles Schumer reaffirmed his opposition to a bill seeking to advances the proposal to make Puerto Rico a U.S. state, and expressed his clear rejection of measures, such as Act 22, that turn the island into a tax haven for billionaires.
At a community meeting in Manhattan’s 11th district, Schumer, elected from New York, said he has made it clear to Democratic Congressman Ritchie Torres and Bronx Borough President Ruben Díaz, Jr., both Puerto Ricans, that he does not favor moving forward with a pro-statehood bill.
”I will not favor their pro-statehood bill until they straighten things out,” Schumer said, according to a recording of the meeting.
In December, Schumer had already told El Nuevo Día that the November 3 referendum - in which statehood won 52.5 percent of the vote - did not reflect the strong consensus required to advance a pro-statehood bill and said he is waiting for an agreement on a “fair” process on the island.
”There is no consensus, there is division,” Schumer said.
When at the community meeting, artist and educator Andrew Padilla claimed that billionaires move to the island to avoid paying taxes, Schumer said he fought over those benefits - about Act 22 - with former governor Ricardo Rosselló.
Schumer believes that Act 22 offers the rich an escape route to avoid paying taxes. “That was disgusting,” he said, comparing those benefits to Republican initiatives. In the past, politicians who had met with Schumer privately pointed at his criticism of Act 22.
While noting that the Joe Biden administration is now releasing relief funds that were held back after Hurricane María, access to Medicaid funds has improved and that changes are being made to the Fiscal Oversight Board, Schumer suggested the idea of conditioning funds on the elimination of measures that turn the island into a tax haven.
”We are going to have better people on the PROMESA Board or get off the PROMESA Board,” Schumer said.
The U.S. Senate leader noted that there is now a new Legislative Assembly in Puerto Rico and that he has discussed these issues with “one of my best friends,” Democratic Congresswoman Nydia Velázquez (N.Y.).
A few days ago, the Internal Revenue Service (IRS) announced a series of audits on the tax obligations of the beneficiaries of Puerto Rico’s Act 22 of 2012, following information required by Congress on that statute.
The Act was passed in 2012 and for Puerto Rico purposes, taxpayers are exempt from taxes on income earned outside the island, as well as from paying capital gains taxes. Taxpayers under Act 22 do pay income taxes in Puerto Rico, according to the rates negotiated in their respective decrees.