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  • Writer's pictureThe San Juan Daily Star

Rep. Méndez Nuñez: What does PDP have against tax reductions?

Rep. Carlos “Johnny” Méndez Nuñez

By The Star Staff

The New Progressive Party minority leader in the House of Representatives, Carlos “Johnny” Méndez Nuñez, accused the Popular Democratic Party (PDP) majority of not wanting to reduce taxes to individuals and small and midsize businesses given that they aren’t considering House Bill 1839, which reduces tax rates.

The former House speaker also requested the elimination of the sales and use tax (IVU by its Spanish initials) at the island’s docks.

“Today the people of Puerto Rico realize, once again, that the Popular [Democratic] Party in the Legislative Assembly has no intention of reducing tax rates to individuals, the working middle class, as well as SMEs [small and midsize enterprises] and corporations,” Méndez said, assailing “the rejection of House Bill 1839, an executive branch measure that, in effect, lowers taxes on the people while implementing mechanisms to provide relief for inflation.”

“There’s no reason to deny people relief, none,” he said.

“The IVU at the docks is a ball and chain on our SMEs, whose acquisition of products is limited by this tax. Not wanting to eliminate this tax makes products and articles more expensive for the consumer. It is a tax measure that has to be eliminated,” Méndez insisted. “What the measure seeks is to make the system more efficient, to avoid increases in the distribution chain that are not necessary, and to lower the price of items to consumers. We demand the elimination of this tax now.”

The former House speaker added that “on June 26, the PDP delegation in the House destroyed any possibility of tax relief for the people when, incredibly, they increased taxes on SMEs that generate over $2 million annually to 36 percent.”

“As if that were not enough, they increased the cost of reform to $655 million, making it unlikely and unsustainable,” Méndez said. “The governor filed another tax relief measure and today we learned that they will not approve it, either. What they want is to perpetuate high taxes. I have, along with my delegation, a commitment to lower [tax] rates for people and we are going to fulfill it.”

The minority leader pointed out that the changes contained in the bill have a total cost of $472 million, with a positive impact on the economy of $367 million, thus increasing collections by $278 million, according to Treasury Department estimates.

The legislation states that households with incomes, whether individual or combined, between $41,500 and $61,500 will see a reduction at a rate of 24%. Those with incomes between $61,500 and $81,500 would also enter the new rate of 24%, thus expanding the base of the tax decrease.

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