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.