A reader wrote to us asking us to “provide with specific detail benefits that Puerto Ricans achieve by statehood and any tax consequences that may impact them.” The writer continued, “I’m pro statehood but I do not know and I assume many more do not know how we will benefit from statehood other than being underrepresented.”
Great question! Many people are in favor of statehood for the sake of justice and equality, but there are practical benefits to statehood as well.
Justice and equality
Before moving on to the practical benefits, we want to state clearly that justice and equality are true benefits as well. A new You.Gov poll shows that mainland Americans — not necessarily Puerto Ricans, just the general population — support statehood. They will not immediately benefit in the way the people living on the Island will, so we can assume that they favor statehood because it is the right thing to do. It is morally wrong for the United States to hold a colony in the 21st century and morally right to give Puerto Rico the justice and equality we — like all Americans — deserve. At a time when we continue to see and hear racist jokes, comments, and behavior, it is worth standing up for equality and justice.
Representation
An equal voice in American democracy is also worth standing up for. As a state, Puerto Rico will have two senators and four or more Members of Congress, as well as Electors in the Electoral College to vote for the President of the United States. A senator from Puerto Rico will think, when a bill comes up in the Senate, “How will this affect my constituents in Puerto Rico?” Right now, nobody in the Senate has this job.
These public servants must support their constituents. A Member of Congress from New York considers how a bill will affect New York. A Member of Congress from Puerto Rico thinks about how a bill will affect Puerto Rico. But our representative in the House has no vote. Naturally, Puerto Rico is not well represented in Congress.
This is not a reflection on our Resident Commissioner, who is passionate and effective, and it is not a complaint about the rest of Congress, who must support their own states. It’s just the reality: without people in Congress with the power to support Puerto Rico, Puerto Rico’s interests will not be supported as they should be.
This lack shows in the fact that Puerto Rico receives less government funding than the states. Puerto Rico faces inequity in healthcare, nutrition assistance, infrastructure support, and much more. With equal representation, we could expect equal treatment.
Taxation
Puerto Rico residents are generally exempt from federal income tax. Like half the residents of the states, the majority of residents of Puerto Rico would not owe federal income tax on their wages. Instead, they would in many cases be eligible for additional tax credits which are not extended to Puerto Rico — or which come and go on the Island.
Puerto Rico residents also have high local taxes and the highest sales tax in the nation. These taxes are up to the government of Puerto Rico, and they still would be up to the government of Puerto Rico as a state. However, a more prosperous Puerto Rico would not have to rely on ruinous taxation for revenue.
Most Puerto Ricans would pay less overall in taxes under statehood than they do now. There are some wealthy people who rely on Puerto Rico’s special tax tricks to avoid paying federal taxes. They would not benefit from statehood in terms of taxes, though they would benefit in the other ways we describe.
And don’t forget, U.S. citizens who live in a foreign country are also liable for federal income tax — that would include Puerto Rico under independence.
Prosperity
32 territories have already become states. All of them became much more prosperous as states than they were as territories.
Would it be different for Puerto Rico? There is no reason to think so. Puerto Rico shows resilience, strong STEM skills, entrepreneurial spirit, and a high level of cooperation and community support. With a level economic playing field, Puerto Rico can expect to thrive economically.
Occasionally we see a claim that statehood would Destry Puerto Rico’s economy. Puerto Rico currently has more poverty than any state, a lower average income than any state, and lower economic benchmarks than any state. Yet Puerto Rico also has the highest amount of pharmaceutical exports, one of the highest rates of education, and one of the highest levels of military participation. Our numbers show that we can accomplish great things — but our economy is in a perilous condition compared with every single state. How could statehood threaten Puerto Rico’s economy? It doesn’t make sense.
Daily life
The results of increased representation and increased prosperity would go beyond money in residents’ pockets. Healthcare and education are struggling in Puerto Rico. Large numbers of doctors have left the Island for better opportunities stateside. The residents of Puerto Rico have higher levels of chronic diseases than many of the people living in the states. Schools suffer from poor maintenance and low infrastructure.
Many people leave Puerto Rico specifically in order to benefit from better opportunities for healthcare and education in the states. Wouldn’t it be better for Puerto Rico to have the same access to healthcare and education as the states?
Territories also usually faced more crime and corruption than states. The benefits of law and order and better organized government have historically been a primary reason that territories fought for statehood. We are not suggesting that Puerto Rico is lawless or corrupt, only that this is a pattern we can see throughout history. It is possible that Puerto Rico could benefit in the same way.
Sovereignty
As a state, Puerto Rico would be empowered by the 10th Amendment to make decisions for itself that a territory cannot make. According to the Constitution, states can make their own decisions about anything not covered in the U.S. Constitution. That includes language, education, most aspects of healthcare, taxation, and much more.
As a territory, Puerto Rico is under the “plenary power” of Congress. Congress gets to make “all needful rules and regulations” for all territories. That can include language, education, taxation…well, anything at all, really.
States have rights and responsibilities that territories do not have. States have a level of autonomy that territories do not have. A state of Puerto Rico would have greater global influence than nation of Puerto Rico would.
Vote for statehood this November — and however many times it takes to get he message through to Congress.
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