|No Taxes No Representation
Last weeks edition of the Herald was replete with articles relating to the March 2, 2002 recognition of Puerto Ricos 85 years of U.S. citizenship, initially granted by the 1917 Jones Act to all residents then on the island and to future persons born within the geographical confines of the territory. In subsequent legislation, islanders were made immune from paying federal income taxes, although they shell out an equivalent amount or more to the local Commonwealth government. Federal Social Security taxes and benefits do apply, as do excise taxes on certain items.
A quid pro quo of this immunity is that the island is not considered an equal recipient to the 50 states in the dolling out of federal entitlements and its inhabitants have no representation in the Congress of the United States. Federal taxation is the "500-pound gorilla" looming in the corner of every room where the future political status of Puerto Rico is debated. Statehood seems less attractive to its partisans when that ugly ape grunts. Advocates of the status quo and independence shriek in fear of its crushing embrace. Ironically, since the per capita income level of Puerto Ricans is less than the poorest U.S. state (Mississippi) many potential filers in Puerto Rico would pay no taxes and some would receive stipends.
What is clear is that as long as the Commonwealth government maintains such a large public sector and operates its budget in deficit, federal taxation becomes moot. Washington bean counters are unlikely to suggest change in this zero-sum game. But what is also clear is that what Congress "giveth," it may "taketh" away and one fine day Puerto Ricans may, like most all other income earning Americans, be circling April 15th on their calendars and doing so in red ink.