Should Puerto Rico move forward or backward?

When you consider voting on Election Day for the status referendum and selection of the next governor, state legislators, mayors and municipal legislators, you must decide whether you want Puerto Rico to move back to the 20th century or forward into the 21st century.

Why? Because the status referendum ballot asks you to decide whether you prefer to maintain the present territorial relationship, under which Puerto Rico, as a territory, would remain subject to the constitutional territorial powers granted by the U.S. Congress. Such a vote would be a reaffirmation of our consent to be ruled by Congress; a consent we shamefully endorsed in 1952, a shameful consent our leaders disguised as a "new" kind of relationship, which they named "commonwealth" in English and "Estado Libre Asociado" in Spanish.

The difference between the names in Spanish and English alone should have been sufficient for the people to realize that former Gov. Luis Muñoz Marín and the Popular Democratic Party (PDP) leadership were pulling the wool over our people's eyes; that not everything was being done aboveboard. Before the 1952 adoption of our local Constitution and our shameful consent to remaining a territory subject to the authority of the U.S. Congress, where we neither had nor have any voting representation, we were a colony by conquest. There was nothing shameful about that conquest in 1898. As a matter of fact, the overwhelming majority of Puerto Ricans welcomed it. They preferred it to remaining under the control of Spain, which had exploited us to the extent that after 400 years under Spanish rule, we were known as the "Caribbean Poorhouse" at the end of the 19th century and the beginning of the 20th century. We were poorer than Cuba, Jamaica, the Dominican Republic and Haiti.

In less than 50 years, as a U.S. territory, Puerto Rico's economy improved so much that we became the island with the highest per capita income in the Caribbean and the jurisdiction with the highest standard of living in Latin America. However, politically, we were still a colony by international standards, and in 2012, we are still a territory and a colony by international standards. The 1952 referendum merely authorized the adoption of a local Constitution fashioned after the U.S. Constitution. Our local Constitution and local laws must abide by and comply not only with the federal Constitution, but also with all federal laws. As a result, in the 1952 referendum, we shamefully consented to being ruled as a territory by Congress.

Now, in this November's referendum, in which we can clearly and unmistakably vote to declare our strong rejection of the existing territorial relationship with our nation, we must take the opportunity to speak loud and clear against the territorial and colonial relationship by voting "No" on the referendum ballot's first question. To vote "Yes," as the PDP leadership is asking their followers to vote, would be another vote consenting to remain under the rule of Congress.

I can't even begin to conceive how any self-respecting Puerto Rican who cherishes his [or her] U.S. American citizenship and believes in democracy can support, or worse still, accept, disenfranchisement, and also accept not having any voting representation in the Congress of the nation whose citizenship he [or she] claims to cherish.

Not only do the PDP leaders and pro-commonwealth status advocates support such an untenable position, but they also actually claim that rejection of the territorial relationship is dangerous for Puerto Rico. They even claim that if Puerto Rico achieves the right to vote for the president of our nation and the right to elect representatives and senators to Congress, we would have less political leverage and power than as a disenfranchised "commonwealth."

Such a statement, supported and repeated by the commonwealth promoters, is an outright lie. I can't conceive how intelligent, educated people can really believe what they are telling the people and expect their followers to believe it.

The commonwealth status leaders not only want Puerto Ricans to turn the clock back to 1952 when Puerto Rico shamefully consented to remain under Congress' territorial powers, but they also want to start the process of attempting to "enhance" commonwealth all over again. After having failed for 60 years in every attempt to enhance "commonwealth," they want to start again so we may remain in the quicksand of "commonwealth" for 60 more years.

However, not content with turning back the clock on the status issue, they also want Puerto Rico to return to the already obsolete and no longer effective economic-development strategies of the also obsolete and discredited "commonwealth." The obsolete economic-development strategies of "commonwealth" are based on obstacles to equal rights and benefits as well as to equal obligations and duties of all other U.S. American citizens.

The first of those outdated economic-development strategies is the 100% tax exemption for manufacturing enterprises. Time has shown that while tax exemption serves as an enticement to investors, the more efficient the manufacturer, the more he [or she] earns and the less workers he [or she] employs per dollars earned. On top of that, the more manufacturing plants, the more infrastructure is required and demanded by them.

However, the largest income earners, the tax-exempt, don't contribute to the increase in government expenditures. As a result, the middle and working classes pay more and more taxes, so the government can provide more services and the infrastructure demanded by the earners of the highest incomes, the tax-exempt. Not only does the government have to borrow more and tax the white- and blue-collar workers more, but also no less than 80% of the net income earned by the tax-exempt industries leaves Puerto Rico. Thus, the gross domestic product figures and many other economic-development data are misleading.

Since I was governor from 1977 to 1985, the New Progressive Party's economic-development plan has been a forward-looking plan. We imposed taxes on the tax-exempt companies (the so-called Section 936 companies) and increased our tax revenue to such an extent that, together with our budget-control strategy, we managed to overcome a $350 million budget deficit in 1976, while also granting significant income-tax reduction to the middle and working classes. The much-needed tax relief put more money in their pockets and, of course, more money in the economy.

With tax reductions, the tax on the tax-exempt companies and the enforcement of the federal minimum wage for the first time, our economy recovered despite prevailing economic difficulties as a result of an unprecedented nationwide interest-rate increase and the first international oil crisis of the late 1970s and early 1980s.

A repeat of the economic-development strategy of the late '70s and early '80s will help us accelerate our recovery. With a 10% tax on the until-now tax-exempt companies that barely pay income taxes of 3% on their net incomes, the government would have enough income to eliminate the deficit and balance the budget. With the additional income, we could legislate higher and much-needed tax deductions on the incomes of the middle and working classes, thus putting more spending money in their pockets, thereby increasing their purchasing power and stimulating our economy.

Instead of looking for obsolete solutions of the past century that have ceased to be effective, we must look forward to the future and demand equal rights and benefits as well as equal duties and obligations, so we may enjoy the higher standard of living and quality of life enjoyed by our fellow citizens in the 50 states of the Union.

Carlos Romero Barceló is a two-term former governor of Puerto Rico (1977-84), a two-term former resident commissioner (1993-2000) and a two-term former mayor of San Juan (1969-78). He was president of the New Progressive Party for 11 years. He is now a consultant involved in real estate, doing business as CRB Realty. His email address is rbarcelo@prtc.net. Comments on this article are welcome at caribbeanbusiness.pr. Go to the "Sign in" link on the homepage to participate. Emails also may be sent to column@caribbeanbusiness.pr.