The Impact of US Policy on Labor and Capital: The Case of Puerto Rico
Carlos F. Liard-Muriente
Central Connecticut State University - Department of Economics
US corporations have enjoyed special tax provisions in Puerto Rico since the Revenue Act of 1921. With the Industrial Incentives Act of 1948, US subsidiaries in Puerto Rico have been at least partially exempt from taxes in the US and Puerto Rico. US possessions received the benefit of Section 936 of the Internal Revenue Code in 1976. Ever since 1983, more than 99% of the benefits have gone to corporations in Puerto Rico. This paper measures the direct and indirect requirements of labor and capital, using Pasinetti's vertical integration approach, for the decades of 1960s and 1970s.
JEL Classification: C67, O14, O38, O54
Date posted: April 6, 2000
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