Taxation without Representation in Puerto Rico?

In the 1750s and 1760s, there was a political slogan popular in America: “No taxation without representation.”

Americans at that time were British citizens. They paid taxes to England, but they had no representation in the Parliament, which was similar to the House and Senate in the United States today. When England passed taxes on sugar, tea, and other items which Americans had to pay, Americans objected to having such laws made by a government in which they had no voice.

The people of Puerto Rico are citizens of the United States, just as the American colonists were citizens of Britain.

Puerto Rico pays taxes to the United States, too. In 2011, Puerto Rico paid $3.3 billion in taxes to the U.S., about the same amount as Vermont. Sometimes Puerto Rico pays more than Vermont.

Some of the kinds of taxes paid by the people of Puerto Rico:

  • Social Security taxes
  • payroll taxes
  • import taxes
  • export taxes
  • commodity taxes

Most people in Puerto Rico do not pay Federal income taxes. However, they do pay local income taxes, and in many cases these are higher than Federal income taxes would be. What’s more, nearly half of the people on the mainland do not pay income taxes. They may have to file, but tax credits and deductions mean that many people in the United States do not pay federal income taxes.

So we can see that the people of Puerto Rico, as a group, pay taxes just as other U.S. citizens do.

What about representation?

U.S. citizens living on the mainland are represented in the U.S. government by a president whom they elect, and by senators and congressional representatives whom they elect. These representatives have a voice in the making of laws that affect the daily lives of their constituents, because they are able to vote on those laws.

U.S. citizens living in Puerto Rico are represented by a single Resident Commissioner. The first Resident Commissioner, Federico Degetau y González, was elected more than a century ago and served from 1901 to 1905. He didn’t even have a chair to sit in while Congress was meeting, and he remarked that Puerto Rico had been better represented in Spain than in the U.S.

Degetau y González spent several years of his tenure fighting to be allowed to speak in Congress. Today’s Resident Commissioner can speak and can serve on committees, but cannot vote.

Just like the Colonial Americans of the 1700s, the people of Puerto Rico do not have adequate representation in the government that collects taxes from them. As a State, Puerto Rico will have the same level of representation as the people living in the 50 states.

It is time for Puerto Rico to become a state. Sign the petition!

29 Comments

Barricada Azul

In Puerto Rico we pay the same percent of Social Security and Medicare, and have fewer benefits than mainland citizens. Medicare and Social Security are taxes too. Many people in Puerto Rico have to pay federal income taxes too. That is because they received payment from Federal Government or they are privately contracted to work from here to the states. There are more reason, but this two are enough to probe that here in Puerto Rico we have “Taxation without representation”.

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Dee

So you would like to opt out of social security and Medicare? Fine. Most people are collecting more benefits than they paid in. They are not the same as regular taxes where you don’t get your money back ever. They are more like insurance for your age.

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Joe Prince

Puerto Ricans have served in every major
war with Honor.Yet we are citizens that can not vote.Humm something wrong.

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Jeff Creedle

How are some of the local taxes greater than federal income taxes? Is their top income rate 4%?

In past elections Puerto Rico chose to remian a territory. They have the benefit of receiving US protection and being able to move to the US. Also, the social security taxes and the payroll taxes are given back to Puerta Rican retirees, and those are probably the largest portion of taxes.

Puerta Ricans conduct so much business off the books that they would be parylized if they had to pay their fair share of income tax.

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USAFmedicVET

You’re spot-on target, there Jeff Creedle! This article is oversimplifies and rationalizes the plight of Puerto Ricans! They enjoy all the advantages of being US citizens without paying Federal Taxes for the privilege.

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Jack

I knew a fellow sailor when I was in the Navy who was from Puerto Rico and his family still lived there. He said that
every year during the election, it is put out to the people to vote on whether or not they want to become a state and
every year it is voted down. So it seems that the people who want to become a state are a minority.

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TiredOfDaBS

That’s because they are bankrupt now and want us to bail them out. We should just emancipate the place and be done with it, or convert it into a huge military installation. More Puerto Ricans live here than in Puerto Rico. Doesn’t sound lime such a great place to me, or they wouldn’t leave. No industry, commerce or real infrastructure. More liability than anything.

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Howard Hills

Wow, that is such a persuasive argument. I am really blown away by the logic. So citizens left the original 13 states and moved into the territories, but there were still more citizens in the original 13 states than the territories, and that meant when the territories were ready for statehood it should have been denied because having less people than the whole U.S. must have meant the territories were not such a great place. If I can follow this amazing logic, all travel and migration between territories and states means territories are bad places and we should have denied statehood to the 32 territories that became states. Gee, how come no one ever explained that before? And since Congress created the local government that has gone bankrupt, and gave that local government the power to tax the citizens, and that revenue is used by the local government to act on behalf of Congress and provide government services as a surrogate for Congress, now that the local government has gone bankrupt, is restoring sound fiscal and budget practices bailing out the citizens or is it bailing out Congress for allowing territorial government it created to spend beyond its means? Speaking of bailing out, what about the 18,000 U.S. citizens who were drafted to bail out the U.S. in WWI, or the tens of thousands drafted to serve in WWII, Korea and Vietnam, or the volunteers who served in Iraq and Afghanistan at a rate higher than most states? And what about the economic impact of federal tax shelters for big U.S. companies who evaded billions in taxes each year for 30 years and profited way out of proportion to local beenfits, while making it harder for small businesses without tax shelters to compete and succeed? Who was getting bailed out in that scam? Answer: The politicians in Congress and its surrogate local government who were getting campaign donations from companies exploiting “job creation” tax evasion laws.

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Mary

Puerto Rico does not pay personal federal income tax to the United States on their Puerto Rican income, yet they receive many benefits from the United States. Yes, they do pay a Portion of their Social Security, Medicare/Medicaid taxes and they are also entitled to receive those benefits as is any other citizen in a state of the United States of American.
It is said that although Puerto Rico voted this year to become a state, that it will never happen because President Trump will never approve because of Puerto Rico’s democrat (socialist- in my opinion) voting and mostly Spanish speaking population. Hmmmm, if this is the reason- why didn’t President Obama wave his magic wand and make them a state in 2012 when they also voted for statehood? Could it be because it takes more than their desire and the ok by the President of the United States? Could it be because there are regulations such as they must be financially solvent and agree to abide by our constitution and laws to be considered for statehood? Puerto Rico does not fill either of those.

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pr51st

Actually, Congress admits new states, and there are no requirements to be solvent. It is required that a territory have a constitution approved by Congress in order to become a state. Puerto Rico’s constitution was approved in 1952.

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californian

you don’t pay federal income tax, therefore you will have limited representation compared to a mainland citizen. want to change that? vote to become a real state and pay full taxes, then you’ll be represented fairly

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pr51st

Puerto Rico pays Social Security and payroll taxes, as well as income taxes on income from the U.S. states. Voters chose statehood in 2017 and in 2012.

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Just me

We all pay Soc Sec and payroll taxes as well as state and local taxes. PR Residents do not pay Federal Taxes on their PR Income.. only income they derive from US sources. They are getting the benefits of protection from the US without paying for them like the rest of the US.. They want voting rights then they should become a legal state and pay their fair share of Federal Taxes!

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Maria Gonzales-Husen

The Puerto Rican governor Carmen Yulin Cruz’s words of criticism against the Trump administration, are not only disgraceful; but a direct insult to the millions of Americans who voted him in office, as well as a slap in the face for the military and FEMA workers helping with the disaster– I am disgusted and will never visit Puerto Rico because of it, and, believe all Puerto Rican’s are the same as their elected governor UNGRATEFUL! GROSS! UNAMERICAN……shame on all of you.

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Kent Salmen

The author would like to equate paying “local” taxes and “social security” tax as if it were a federal contribution and it isn’t.
I agree with Maria that Puerto Rico’s governor criticism is not warranted. Somebody should inform this dummy that if you don’t contribute to providing FEDERAL TAXES then you shouldn’t be receiving the benefits paid for by FEDERAL TAXES. The failed leadership if Puerto Rico and made it into a bankrupt s-hole. As I tell my children, you can have a say in the decision making when you step up and pay your own way. The same goes for the children managing Puerto Rico.

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Andy J

What does the US “mainland” have to gain by adding PR to the Union? Not much. Before Maria, it’s crippling debt would have been absorbed by the US govt and passed along to the taxpayers. Now with Maria, they’re relying on the US more than ever because they can’t even manage themselves, let alone a budget of any kind. I can’t imagine what would happen if PR were an independent nation, they wouldn’t be able to scrap together a fraction of what the US govt is doing for them. Any chance we’ll see all of the “aid” reimbursed? Not in our life time.

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pr51st

Just a reminder that federal funds distributed for emergency disaster response (to states or territories) never gets reimbursed.

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Kent Salmen

“Most people in Puerto Rico do not pay Federal income taxes. However, they do pay local income taxes,”
Who gives a crap! Local taxes stay local. I as an American pay all the same taxes INCLUDING FEDERAL. “Most people in Puerto Rico do not pay Federal income taxes” Well the author would like you to believe this is the same and it isn’t. What Puerto Rico actually wants is representation without taxation. To be more specific they want FEDERAL DOLLARS where little to none are contributed. The local taxes paid are kept local and spent local. America NEVER sees a penny of those. Social Security taxes are collected and paid back directly accordingly to earnings. Lets be honest, Puerto Rico is a bankrupt s-hole and only wants to formally become a state for more handouts and nothing more. The United States need less freeloaders and not more. Want to become the 51st state then pay federal taxes like us Americans who actually work and contribute.

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Pedro Campos

Kent the Trumptard..Educate yourself on Puerto Rico’s history so that you can speak with intelligence on the matter instead of ignorance…from a Economist in Puerto Rico:

Ms. (Dr.) Rivera Negrón is a full professor at the University of Puerto Rico, with a Ph.D. in Economic Development. She is also President of the Association of Puerto Rican Economists.
Her take:

Really, we want everything done for us?
Since 1917, as U.S. citizens, Puerto Ricans have proudly served in our nation’s armed forces. Around 700,000 of our soldiers have participated, with distinction and courage, in all U.S. theaters of wars, including the 1st and 2nd World Wars, Korea, Vietnam, Kuwait, Kosovo, Afghanistan, and Iraq.
The famous 65th Infantry Regiment, a distinguished unit of the U. S. Army that served in the Korean War, was mostly composed by Puerto Rican soldiers, hence their nickname, the “Borinqueneers”. It is one of the most revered unit in the history of entire U.S. Armed Forces.
Moreover, Puerto Rico is a captive market of the U.S.: the 5th largest market in the world for U.S. products. 85% of everything purchased and consumed in Puerto Rico, comes from the U.S.
All of these products are wildly overpriced, thanks to the “price protection” of the Jones Act, aka the Law of Cabotage.
For the past few years, consumer spending on the island has hovered at $35 billion per year.
Thanks to the Jones Act, the prices paid by Puerto Rican consumers are roughly 20% higher than on the mainland.
20% of $35 billion (the annual consumer spending) is $7 billion. This is the amount of excess prices on goods paid every year, by Puerto Rican consumers.
85% (the percentage of goods that come from the US) of $7 billion is $5.95 billion.
So Puerto Ricans pay roughly $5.95 billion in annual excess profits to US corporations, thanks to the Jones Act. That amount exceeds the $4.6 billion in federal benefits that the US “gives” to Puerto Rico. And this is counting just the excess profits, on top of the original profits.
Additionally, all employers and employees in Puerto Rice are still subject to payroll taxes as imposed by the Federal Insurance Contribution Act (FICA), including Social Security, Medicare, and unemployment taxes. The Social Security and Medicare taxes are withheld from Puerto Ricans’ paychecks just as they are for workers living within the rest of the United States. The current Social Security tax rate is 6.2%, and the current Medicare tax rate is 1.45%. Puerto Rican employers must also pay unemployment taxes, the current rate for which is 6.0%. For low income workers, these taxes are more significant than income taxes because they pay a larger share of their income in payroll taxes than high income people do.
Finally, the federal government taxes Puerto Ricans on any of their investments made in the mainland United States.
Conversely, Puerto Ricans do not receive many of the same tax incentives as their fellow U.S. citizens living in the mainland. For example, Puerto Rican families must have at least 3 children before they are eligible to receive the refundable portion of the Child Tax Credit, and no one in Puerto Rico can qualify for the Earned Income Tax Credit, both of which are proven work incentives. In the states, the Earned Income Tax Credit and the Child Tax Credit were responsible for lifting 9 million working people out of poverty in 2010 and reducing child poverty by 7% in 2014. Puerto Rico’s working poor cannot access these poverty-fighting measures even though Puerto Rico’s poverty level is higher than that of any state. For a detailed analysis of Puerto Rico’s tax treatment, see the Joint Committee on Taxation’s “An Overview of the Special Rules Related to Puerto Rico and an Analysis of the Tax and Economic Policy Implications of Recent Legislative Options” (JCX-24-06, June 23, 2006).
With facts and figures on a detailed chart, Prof. Rivera Negrón demonstrated one astounding fact: that in a typical year (2008), the island received a total of $4.6 billion in federal dollars, while contributing $71.6 billion dollars back to the US economy.

Futhermore…read up on the US policy and history after 1898 for Puerto Rico …you’ll start to see the picture if you are as bright as you claim to be….better yet, start with the indigenous people who lived on the island(Arawak/Tainos) before your hero Columbus claimed the land for Spain. Over 500 hundred years of Spanish & U.S. rule will do wonders to a populace psyche.

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J howard

According to Wikipedia Puerto Rico receives about 21 billion dollars from the US federal government annually. But according to this article it only pays about 3.3 billion in Federal taxes annually. The state of Michigan receives 17.7 billion and pays 77 billion. My question would be is there really taxation without representation. Or does Puerto Rico just want the benifits without taxation.

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