The poverty rate there is a very
high of 45% per cent. Last year alone, over 80 thousand people left for the
main land the United States. Puerto Rico has already shut down more than 150
schools in the past few years. The government there has raised sales taxes in
stores from 7% to 11% to raise money. That is far higher than any sales taxes
in the United States. Everything there is overpriced and everyone is being laid
off. When is the United States going to
intervene with this problem? These people are American citizens who have become
Supreme Court judges, famous sports figure even the new stars of the Broadway
hit Hamilton come from Puerto Rico. How did we get to the point where even he
has invited members of Congress to see his Musical about Hamilton for free just
to get them to vote on new laws to help the Island.
Puerto Rico is not a state. In a
1901 Supreme Court case it said that the Island is a territory that is foreign
to the United State. The state issue is another argument that even the Island
people disagree. Because it is a territory, many laws that apply to the states
do not apply here. For example, Section 946 gives tax breaks to attract
business to Puerto Rico. In the 1970’s business was booming in Puerto Rico
because of tax breaks. At its peak Puerto Rico was home to 80 pharmaceutical
companies. Unfortunately for Puerto Rico Congress got rid of those tax breaks
fazing them out completely by 2006. Between that and the recession Puerto Rico
has lost half its manufacturing jobs.
To pay its bills the government
started issuing lots of municipal bonds. We all know that a municipal bond is
basically an IOU where Puerto Rico promises to pay it back with interest. For years people lined up to buy the bonds
because they were triple tax exempt.
Imagine an investment without having to pay any state, local or federal taxes. Even
the large bond funds were full of Puerto Rican bonds. So no taxes means no
money for government programs. They have paid certain bond holders first before
government agencies. The United States owes 1.2 Trillion dollars to China but
our states keep the money flowing into government agencies. Puerto Rico made a big mistake by promoting these tax
free bonds.
Another problem is that Puerto
Rico cannot file for Chapter 9 Bankruptcy. That is a big problem if you are
massively in debt. This happened due to a tiny Amendment to a law in 1984. The
worst part is that no Congressman can reveal why it was written into law. Get
rid of the old wood in Congress and make new laws to save our beautiful Puerto
Rico from destruction.
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