Rep. Aponte Hernández rejects proposed Section 936 comeback

Rep. José Aponte Hernández

By The Star Staff

Veteran lawmaker José Aponte Hernández on Tuesday rejected the proposal by Resident Commissioner Pablo José Hernández Rivera to ask Congress to reinstate former Section 936 of the federal Internal Revenue Code, which provided tax incentives to U.S. subsidiaries in Puerto Rico.

Aponte asserted that when it was in effect, Section 936 generated wealth for only a few entrepreneurs and investors, and did not create a significant number of jobs. Supporters of the proposal, however, dispute the lawmaker’s remarks because, they say, the Section 936 repeal resulted in the shutdown of numerous pharmaceutical companies, dwindling government revenues and job losses.

“The resident commissioner, in his eagerness to take Puerto Rico back to the 1960s and 1970s, is now seeking to have Congress amend the federal Internal Revenue Code to reimplement Section 936. This is a terrible idea with no future,” said Aponte, a former speaker of the island House of Representatives. “The reality is that the companies that benefited from the tax credit provisions under Section 936 did not create the necessary number of jobs to support proper economic development in Puerto Rico. Moreover, they did not provide equitable pay to their workers compared to those in the states; compensation was significantly lower compared to the profits generated through the tax incentives.”

“If we examine the available data, including official information from the General Accounting Office (GAO), we see that the companies taking advantage of Section 936 did not create jobs, did not improve wages, and did not promote sustained economic development,” the New Progressive Party lawmaker stressed. “We do not need to revert to outdated models to shape our economic future, especially one that has already proven to be ineffective.”