Why doesn't Puerto Rico pay taxes?
Answer:
Puerto Rico is classified by the U.S. government as an independent taxation authority by mutual agreement with the U.S. Congress. A common misconception is that residents of Puerto Rico do not have to pay federal taxes. Residents of the island pay federal taxes (import/export taxes, federal commodity taxes, social security taxes, etc.) and some even pay federal income taxes (Puerto Rico residents who are federal employees, or who do business with the federal government, Puerto Rico-based corporations that intend to send funds to the U.S., etc). While most residents of the island do not pay federal income tax, they do pay federal payroll taxes (Social Security and Medicare), as well as Puerto Rico income taxes. In addition, because the cutoff point for income taxation is lower than that of the IRS code, and because the per-capita income in Puerto Rico is much lower than the average per-capita income on the mainland, more Puerto Rico residents pay income taxes to the local taxation authority than if the IRS code were applied to the island. Puerto Rico residents are eligible for Social Security benefits upon retirement. Puerto Rico is excluded from Supplemental Security Income (SSI). Puerto Rico receives less than 15% of the Medicaid funding it would be allotted as a state. For Medicare, Puerto Rico pays fully but only receives partial benefits.
As statutory U.S. citizens, Puerto Ricans may enlist in the U.S. military. Puerto Ricans have been included in the compulsory draft, when it has been in effect. Puerto Ricans have fully participated in all U.S. wars since 1898, most notably in World War II, in the Korean and Vietnam wars, and the current Middle-Eastern conflicts. Many Puerto Ricans soldiers have died serving in the Iraq and Afghanistan conflicts.
Because they are territories, not states! The best of both worlds!
Because the 16th Amendment only applies to states, not to territories. Do a little research next time.
They don't pay taxes in the lower 48 so why should they pay taxes in their homeland.
Leave it be. It's historical.
we can torture people in their countries.
also, we have the option to sell their rights to somebody else at anytime.
we rule.
that's not true. they pay taxes like we do. what they do in puerto rico is their business.
Actually, no. They don't have the same rights. They can't vote in presidential elections and don't have senators or reps in Congress.
Puerto Rico and Guam are self-governing Commonwealths and the people that live on the Islands have to pay income and sales taxes to their Tax Collecting Agency which is patterned after the IRS in the States. The tax rates of the Island Tax Authority are similar to the tax rates of the IRS. The money they collect pays for the cost of the government and some of the cost of services provided to the people just like the individual States of America do. The Federal government does collect excise taxes and custom's duties on imports of foreign goods to the Islands and that money goes into the federal treasury. The people of the islands are not free-loaders and they do their best to pay for their government and their services just like the individual States do. Puerto Ricans also pay the same Social Security taxes as continental Americans do. TWH 06142007-6
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15 % of my earnings are sended to the IRS + Central Goverment taxes ( between 10 & 15 % ) + Municipal taxes + Property taxes + IVU.
Huh. I don't know why people believe that we don't pay taxes.
now that I know that you know the the reason, I want to know why so many leave the island...note to heeltap-lesser minds my asp, you're a joke, adios
because they are not a state but a territory. And most of their revenues is due to tourism and exports, which makes them independent on their behalf.
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