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> For instance, most Puerto Rico residents don’t need to pay federal income taxes. Most US households in general haven't paid federal income tax in the past co
by DoughnutHole 4y ago
> For instance, most Puerto Rico residents don’t need to pay federal income taxes.
Most US households in general haven't paid federal income tax in the past couple of years. In a good year it's close to 50-50.
- lazide 4y agoThere is a difference between ‘required to do the math, but gets money back/doesn’t owe anything’ and ‘completely exempt’. Puerto Rico is exempt except for certain classes of payments (mainly ‘money directly from the feds’ and ‘money that is intentionally going straight back to the mainland’. There is a whole ecosystem of companies in the island for instance which use this for tax arbitrage, providing services for mainland folks at lower rates because of it, which they couldn’t do if they had the same tax rates. The economy there is… unusual, partially because of it’s current semi-favored situation. If it had to play in an even playing field from the mainland US, it isn’t clear what it would look like, but it would probably shift to even more of a resort/retirement place (like Hawaii), which is not to the locals benefit in many cases. At least if they want jobs that aren’t just hospitality type jobs, which aren’t for everyone.