An article in Forbes brings up an interesting argument about Puerto Rico which recently showed up in a court case. The case is not in Puerto Rico and the petitioner is not from Puerto Rico. But the argument relies on a claim that Puerto Rico is not really an unincorporated territory.
What’s an unincorporated territory?
The Department of the Interior defines “incorporated territory” like this: “A United States insular area in which the United States Congress has determined that only selected parts of the United States Constitution apply.”
That’s true, but it’s only true in the sense that you can explain a fever by saying that it refers to an elevated temperature.
It’s more accurate to say that unincorporated territories could become states, but could also become independent nations as the Philippines did. Incorporated territories are waiting for statehood and have not yet become states, usually because their populations are too small. Unincorporated territories, while still belonging to the United States, can continue indefinitely as territories.
The most important thing about unincorporated territories in this case is that Congress is allowed to treat them differently from states. Congress can provide less in benefits for Puerto Rico, for example, and can also say that most residents of Puerto Rico don’t have to pay federal income taxes.
The case of Brian Swanson
The Forbes article describes a lawsuit brought by a Georgia high school teacher named Brian Swanson. He claimed the he should not have to pay federal income tax because these taxes are not collected uniformly throughout the United States. These taxes must be collected from the states and incorporated territories, he argues, and they are not collected from Puerto Rico.
Since Puerto Rico is an unincorporated territory, Congress gets to make all the rules and does not have to treat Puerto Rico the same as states are treated.
But Swanson argues that Puerto Rico is not actually an unincorporated territory. It’s really incorporated, he says. Therefore, Congress should collect federal income tax there, but does not. That means, according to Swanson, that they can’t collect federal income tax in Georgia, either. The rules have to be the same everywhere.
Why does Swanson think Puerto Rico is incorporated?
“Puerto Rico may have been considered ‘unincorporated,’ and not part of the United States in times past,” Swanson claims, “but its status has changed. The two bills introduced in Congress to admit Puerto Rico as a state are evidence that Congress has incorporated Puerto Rico and that its status has changed from an ‘unincorporated’ Territory.”
There have been more than two statehood bills, but the point is the same. “Asking Mr. Swanson to pay more income tax than other U.S. citizens based solely on geographical location is ridiculously unfair.”
Swanson’s claim that Puerto Rico is not really an unincorporated territory rests on the fact that “Puerto Rico is on a path to statehood,” he says.
Swanson explained his thinking on this more fully to Forbes:
“Petitioner believes that Puerto Rico has been an incorporated Territory ever since Congress approved its constitution in 1952. When the western territories were settled, writing a constitution was an important step toward statehood after the territory was organized and the requisite number of settlers resided in the territory. The door to statehood was opened to Puerto Rico once its constitution was approved by Congress. The proposition, ‘Puerto Rico is not clearly destined for statehood’ has been false ever since that constitution was approved and from that moment, Puerto Rico no longer qualified as an ‘unincorporated’ Territory. Puerto Rico has been ‘incorporated’ and subject to the Constitution’s Uniformity Clause ever since.”
Swanson on the Insular Cases
Swanson would like his tax lawsuit to be the means of giving the Supreme Court a chance to rethink the Insular Cases. “There is a willingness in the Supreme Court to revisit the injustice caused by the Insular Cases,” he wrote, “based on Justice Gorsuch’s concurring opinion in United States vs. Vaello-Madero.”
Swanson is not primarily concerned with the injustice of Puerto Rico’s lack of voting rights and limited access to federal benefits. He is more concerned that he has to pay federal income tax and wealthy individuals living in Puerto Rico don’t have to pay that tax.
Does this case change anything?
The judge in this case did not consider whether Puerto Rico might have evolved from an unincorporated territory into an incorporated one. He said the lawsuit was “frivolous” and dismissed it.
Territories do not have to be incorporated in order to become states. In fact, California was never a territory of the United States. Texas was an independent nation when they applied for statehood. West Virginia was carved out of Virginia, and was never a territory at all, let alone an incorporated territory. In fact, there are half a dozen states in addition to the original 13 colonies which were not territories before they became states. There is nothing in the U.S. Constitution that requires a territory to be incorporated before it can become a state.
However, if Puerto Rico is truly an incorporated territory, then the U.S. Constitution would apply fully, as Justice Gorsuch said it should. It would be acknowledged that Puerto Rico is on a path to statehood and independence might no longer be on the table.
Swanson is not the first person to claim that Puerto Rico is actually — or at least should be — incorporated. He is appealing the court’s decision. Maybe he will still be the catalyst for a reexamination of the Insular Cases.
Either way, Congress can admit Puerto Rico as a state at any time with a simple majority. Ask your legislators to cosponsor HR2757, the Puerto Rico Status Act, and give Puerto Rico a permanent, nonterritorial status.
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