Taxing Puerto Rico to Death
Portside Date:
Author: Nelson A. Denis
Date of source:
Orlando Sentinel

There is a national misperception of taxpayers in Puerto Rico: that they pay less than their fair share, and are leeching off the mainland economy. Yet the exact opposite is true. Puerto Ricans on the island are the most heavily taxed of all U.S. citizens.

Puerto Ricans pay Social Security, Medicare and other payroll taxes – but unless they are federal employees, they do not pay federal income taxes. With an island per capita income of $11,688, a single filer using the standard 2017 deduction would owe only $534. This Puerto Rican “tax preference” of $534 is offset by all of the following:

For the past 98 years, the Jones Act has raised the price of all goods in Puerto Rico by 15 percent to 20 percent, to the point where the same car costs $6,000 more in San Juanthan it does in Miami. Economists have estimated the island-wide consumer cost of the Jones Act to be $1.7 billion per year. With an island population of roughly 3.4 million, the Jones Act is thus a de facto tax of $500 on every person in Puerto Rico. The Jones Act alone, virtually wipes out the $534 “income tax preference” in Puerto Rico. But here is what Puerto Ricans additionally face:

From 2013 to 2014, 105 different taxes were raised in Puerto Rico.

Over a 19-year period, from 1990 to 2009, Puerto Rico paid more federal taxes than six U.S. states.

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