San Juan mayor says GOP tax scam worse for Puerto Rico's economy than two hurricanes


The Republican tax scheme goes out of its way to impose an extra 20 percent tax on Puerto Rico. San Juan Mayor Carmen Yulín Cruz is sounding the alarm.

One of the most shocking provisions in House Speaker Paul Ryan’s tax scam is how it singles out Puerto Rico for a sharp tax increase.

And in conversation with MSNBC’s Rachel Maddow, San Juan mayor Carmen Yulín Cruz laid out just how devastating this would be for Puerto Rico, even more than recent hurricanes that have left much of the island without power or water.

"This would be a much more devastating blow to our economy than Irma and Maria put together," Cruz said.

CRUZ: [The tax bill] puts an excise tax, an import tax, on products and services from Puerto Rico. 20 percent.

MADDOW: Wait, so products made — like pharmaceuticals, big manufacturing sector in Puerto Rico — products made in Puerto Rico and exported to the United States—

CRUZ: Would get a 20, 20 percent tax.

MADDOW: That’s not there — a tax that’s not there now?

CRUZ: That’s not there’s now.

MADDOW: But that would cripple the Puerto Rican economy.

CRUZ: Well, it’s crippled already, it’ll obliterate it. This would be a much more devastating blow to our economy than Irma and Maria put together.

Under the bill, which passed the House two weeks ago with virtually no debate, goods manufactured in Puerto Rico will indeed be subject to a one-time 20 percent tax when shipped to the mainland. The Senate version of the bill, which is hurtling to the floor with almost no debate, may include a similar provision.

The provision is essentially a watered-down version of Trump’s promise earlier this year to impose a “border adjustment tax” on multinational corporations that ship jobs overseas. But Puerto Rico is a U.S. territory. Taxing goods produced there makes no sense.

Cruz’s warning is not hyperbole: The provision could lead to total collapse of the manufacturing sector in Puerto Rico. Indeed, one key reason the island is in debt to begin with is that a GOP-controlled Congress sharply raised corporate taxes on the island in 1996, driving away many key employers.

Much has been made of how the Republican tax scheme is a handout to billionaires at the expense of working families. But the entire island of Puerto Rico would carry a particularly cruel burden. In every way, Republicans have built their plan on the backs of the vulnerable — and they must be stopped.