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Sat Nov 28, 2020, 05:05 AM

The "Tax Deal" View of Puerto Rico's Status

In United States v. Vaello-Madero, the First Circuit Court of Appeals pointed out in its discussion over federal benefits that ď[t]he residents of Puerto Rico not only make substantial contributions to the federal treasury, but in fact have consistently made them in higher amounts than taxpayers in at least six states[.]Ē

The contributions of different states and territories to the federal treasury vary a great deal. The United States doesnít make funding decisions for states based on their contributions to the federal treasury. Prosperous states are not rewarded by having most of their contributions sent back to them in the form of government grants. Neither are less prosperous states given less funding because they donít contribute as much to the federal government.

In the case of Puerto Rico, there is a tradition of claiming that the island gets less than states because residents generally donít pay federal tax on their incomes beyond the payroll taxes that fund Social Security and Medicare. Since they donít pay as much in, the story goes, they donít get as much. However, the facts donít bear that out.
Puerto Rico contributes to the U.S. Treasury

According to the IRS, Puerto Ricoís total contribution to the U.S. Treasury in 2019 was $3,528,739,000.

For comparison, Vermont paid $4,505,097,000 and Wyoming paid $4,743,997,000.

Read more: https://www.puertoricoreport.com/the-tax-deal-view-of-puerto-ricos-status/#.X8IR4rNMHIU

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