The Congressional Task Force on Economic Growth in Puerto Rico, an 8-member group with a mandate to help Puerto Rico head toward the future in a position of economic strength, has come up with a draft plan for Puerto Rico.
The plan includes some of the recommendations which have been most popular among advisors across the board:
- The inequity in Medicaid funding between Puerto Rico and the States
- Extension of the Child Tax Credit to Puerto Rico
- A temporary reduction of Social Security withholding
Another issue being discussed is the extension of the Earned Income Tax Credit to Puerto Rico.
These items together would bring billions of dollars to Puerto Rico.
However, we can’t overlook the fact that most of these items — in fact, everything but the Social Security tax reductions — would happen immediately if Puerto Rico became a state.
Statehood will also remove the uncertainty that stands in the way of investments in business in Puerto Rico and remove the inequity in funding for highways and other infrastructure issues that make Puerto Rico a less appealing business location. And history has shown that territories become more prosperous once they become states. There is no reason to think that this would not be true of Puerto Rico just as it was of Alaska and Hawaii.
Apart from the things that would naturally change as a consequence of statehood, the Task Force has also been discussing tax incentives for investment in Puerto Rico. This item, however, may have to wait till the next report. With a new president and changes in Congress, some members of the Task Force are suggesting that it might be most practical to wait and see how Puerto Rico will be affected by decisions made by the new government.
Congress is allowed to treat territories differently from states. We don’t know, at this point, how the U.S. tax structure might change, but Puerto Rico will not automatically gain the same benefits states do… until Puerto Rico is a state. Sign the petition and we will send it to the new Congress.