Is the Government getting Ready to Bail out Puerto Rico?

This should bring a big smile to a few faces here ............. Just kidding

http://dailycaller.com/2011/01/11/thedc-exclusive-a-secret-6-billion-bailout-for-puerto-rico/


Like the finances of governments around the world, the finances of the government of Puerto Rico are a disaster. They are in the hole for about roughly $6 billion. So what do they do? They tax foreign firms to the tune of $6 billion.

Foreign firms really mean U.S. firms, and a lot of those foreign firms are actually Big Pharma firms.

Big Pharma is in Puerto Rico for tax breaks, not tax hikes, but Big Pharma isn't sweating this one too much.

The Daily Caller reports:

http://dailycaller.com/2011/01/11/thedc-exclusive-a-secret-6-billion-bailout-for-puerto-rico/#ixzz1ArHDuZ00

Gov. Luis Fortuño signed the new tax into law Oct. 25. That day, the Washington, D.C.-based whiteshoe law firm Steptoe & Johnson issued him a legal brief arguing U.S. firms should receive money from the U.S. government to offset the Puerto Rico tax increase, which Fortuño sent to the Internal Revenue Service, where a decision is pending.

The international tax law in question is complicated, but experts agree the tax, and the request, are an unusual use of portions of the tax code intended to avoid double taxation on U.S. firms in countries that have reciprocity treaties with the U.S.
Got that? Puerto Rico taxes Big Pharma, Big Pharma for all practical purposes sends the tax bill to the U.S. government. The U.S., therefore, bails out Puerto Rico.

Supposedly, Big Pharma is upset about this last minute tax. The IRS hasn't yet ruled yet on whether it will allow the tax credit, which would allow the bailout to begin. But, this ruling isn't going to stop at a technocrat's desk in the IRS. This decision will be made at that big white house.