Kamala Harris has big dreams for what rich people can do for the U.S. Treasury via new taxes and higher tax rates (see The Harris unrealized capital gains tax and Bidenflation and Unrealized capital gains are already taxed by the federal government… for example).
The typical American of means, however, can already escape federal taxation by moving to Puerto Rico. “How Puerto Rico Became the Newest Tax Haven for the Super Rich” (GQ):
In 2012, Puerto Rico had passed two laws intended to make the island a “global investment destination.” Act 20 allows corporations that export services from the island to pay only 4 percent tax. Act 22 goes much further: It makes Puerto Rico the only place on U.S. soil where personal income from capital gains, interest, and dividends are untaxed.
The last big tweak to U.S. taxation was in 2018. Plainly, the rates were low enough that most rich Americans refrained from making the move to the Ritz-Carlton Dorado. But what if Kamala Harris and fellow Democrats are able to deliver on their promise to soak the rich? Wouldn’t there be a lot more rich people who would make the move for 183 days per year in order to avoid losing a big percentage of their wealth? If so, the only way to stop the erosion of expected tax base would be to eliminate Puerto Rico’s ability to offer Act 22 treatment and the only way that I know to strip Puerto Rico of its tax sovereignty is to make Puerto Rico a state.
Not that easy. Income source governs treatment and you need to spend a lot of days each year in PR to qualify, among other issues.
Also this:
https://www.forbes.com/sites/tomcullinan/2024/06/21/irs-likely-to-increase-scrutiny-on-the-puerto-rico-act-22-tax-break/
1. “There are rules that are designed to preclude U.S. taxpayers with appreciated assets from avoiding U.S. income tax on the growth by becoming a resident of Puerto Rico.”
2. “The IRS has responded with plans to ‘deploy a team of additional agents and open audits of individuals’ claiming the tax break. … The most aggressive taxpayers should consider consulting with a criminal tax attorney.”
They already want to make it a state to help stuff the electoral college, so I wouldn’t worry about this one too much.
We should make all countries, from which we welcome illegal migrants, a State of the USA. That’s how we solve our illegal migration issue.
That’s racist colonialism! The only way is to let those people come here.
Does any resident of PR pay federal income taxes? High unemployment and I read somewhere that something like 50% of working age adults are collecting SS disability.