These days Latinos in the Republican Party feel about as welcome as an IRS audit. The presidential debates have been punctuated by unsettling displays of anti-immigration one-upmanship. Even if Republicans manage to nominate a moderate presidential candidate, it will be very hard for the GOP to recover and win over resentful Latino voters.
There is, however, a strategically important Latino constituency that might be receptive to a Republican appeal - the 848,000 Puerto Ricans residing in Florida, popularly known as Disneyricans.
Over 40 percent of Disneyricans moved from Puerto Rico to central Florida during the last decade, driven by the deteriorating Island economy. They mostly grew up in Puerto Rico and tend to be more socially and politically conservative than other Puerto Ricans on the mainland. Progressive immigration reform is a preference but not a priority because Puerto Ricans are born American citizens.
While Disneyricans generally favor Democrats and overwhelmingly voted for Obama in 2008, they have also backed Republicans, like Governors Jeb Bush and Senator Marco Rubio. President Obama won Florida by less than 240,000 votes and to win again, he needs Disneyrican support in 2012.
All told, there are 4.6 million Puerto Ricans living in the United States today. They have a sense of cultural identity that runs deeper than the oft satirized New York City Puerto Rican Day Parade. Puerto Ricans care about their Island and at the national level they have rewarded the party that has represented the interest of Puerto Rico most consistently- the Democratic Party.
This dynamic can be altered in Florida, where the Puerto Rican electorate is less entrenched. But for this to happen, the Republican Party must find and seize an issue that is important to these voters.
Conveniently, an opportunity to make inroads with Puerto Rican voters materialized in the form of H.R. 3020, the Puerto Rico Investment Promotion Act, a bipartisan bill that is critical for the success of Puerto Rico and that is consistent with Republican free-market principles.
Under this law, U.S. domestic companies incorporated in Puerto Rico that earn at least half of their income in Puerto Rico will not have to pay Federal taxes on profits generated in the Island. Moreover, earnings generated in Puerto Rico can be distributed to the U.S. parent companies as dividends, subject to a reduced, yet appealing, tax rate.
At present, almost all U.S. companies operating in Puerto have few incentives to repatriate their earnings to their U.S. parent companies, where they will be subject to full Federal taxation. Consequently, these earnings remain outside the U.S. in foreign banks. This law will attract profits back to the U.S. where they will generate Federal revenues. This law will also strengthen and increase the number of job creators both on the mainland and the Island.
The bill is backed by Puerto Rican Governor Luis Fortuño, the pro-statehood darling of the Republican Party, as well as by the opposing commonwealth party and the business community. Puerto Rican politics are dominated by bitter rivalries. The formation of a bipartisan Puerto Rican coalition is unprecedented. It is also indicative of the severity of the Puerto Rican recession and the immediate need to create jobs for the 16 percent of American citizens that are unemployed in the Island today. Without a structural intervention, the Puerto Rican economy will continue to deteriorate and related social ills will escalate.
Introduced by Puerto Rican Resident Commissioner and Democrat, Pedro Pierluisi, H.R. 3020 has been referred to the House Ways and Means Committee. Given the current budgetary climate, it is unclear how Democrats will react to this initiative. What is clear is that this bill will need many backers to make it past the Congressional Deficit Panel gauntlet. There is no reason why Republicans cannot be the champions of this bill and push for its passage.
The Puerto Rico Investment Promotion Act will create tens of thousands of jobs and jumpstart the Puerto Rican economy. Its passage will be welcomed by struggling American businesses and every single Puerto Rican in this country. If Republicans can claim credit for its passage, they will be in a better position to win over Puerto Rican voters, particularly in Florida, where it really matters in 2012.
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