¿Puerto Pobre? “Taxation Without Representation” and U.S. Unincorporated Territories
In the second half of the 18th century, in the wake of the Revolutionary War, inhabitants of the British colonies in North America averred that “taxation without representation,” to which they were subjected by the British crown, constituted “a tyranny.” James Otis, a colonial activist from Massachusetts and propagator of the phrase, elaborated on this claim further in inIn 1764 in “Rights of the British Colonies Asserted and Proved,” arguing that “the very act of taxing, exercised over those who are not represented, appears to me to be depriving them of one of their most essential rights, as freemen; and if continued, seems to be in effect an entire disfranchisement of every civil right.” The framers also committed their opposition to taxation without representation to paper as they drafted the Declaration of Independence of 1776. Among the 27 particulars documenting the king’s “repeated injuries and usurpations” of the Americans’ rights and liberties, the framers grieved that the monarch “impos[ed] taxes on us without our consent.” Consequently, “no taxation without representation” became one of the most important principles to be followed by the government of the newly established United States of America.
Nowadays, legal scholars continue to deem U.S. citizens as protected from this “tyranny” by several clauses of the U.S. Constitution. For instance, Article I, Section 7, Paragraph 1 provides that “All bills for raising revenue shall originate in the House of Representatives.” As a result of the Connecticut Compromise, the U.S. Congress was designed so that the one of the chambers of the bicameral legislature – the Senate – would equally represent the various state legislatures, and the other one – the House of Representatives – represented the people of the United States. Consequently, as argued by Gerald R. Thompson of the Lonang Institute, this provision guarantees that people’s consent must precede the imposition of any federal tax.
Nevertheless, in 2017 U.S. citizens continue to be subject to federal taxes, even though they do not enjoy representation at the federal level. The District of Columbia usually serves as a case in point when the issue of contemporary “taxation without representation,” although over four million inhabitants. I am particularly interested in the case of Puerto Rico.
Residents of United States’ largest unincorporated territory do enjoy some exemptions from federal taxes. Section 933 of the Internal Revenue Code of 1986 exempts bona fide citizens who are residents of Puerto Rico for the entire taxable year from Federal taxes on income earned in Puerto Rico. At the same time, the federal taxes paid by Puerto Rico residents include import/export taxes, and federal commodity taxes, among others. Residents also pay federal payroll taxes, such as Medicare taxes. Employers are additionally subject to both, FICA and FUTA taxes. Consequently, Puerto Rico is far from being free from the burden of taxation imposed by Washington.
The residents of Puerto Rico observe the same responsibilities as other U.S. citizens, but are denied voting equality by the courts. Taxes imposed on Puerto Rico residents are charged at the same rate as elsewhere in the United States. Borinqueños are also subject to military conscription. Nevertheless, unlike the District of Columbia or the 50 states, they do not have the right to vote in presidential elections. They also lack representation in the Senate and have only one non-voting delegate in the House. Even so, Puerto Ricans embrace the ideas of American democracy, and enthusiastically participate in the political process. As observed by Daniel Weeks from the Edmond J. Safra Center for Ethics at Harvard University, “fully eight in 10 voting-age Puerto Ricans regularly turn out in the island’s local elections,” which makes Puerto Rico home to one of the highest rates of voter participation in the world. Most recently, in the June 11, 2017 plebiscite on the political status of Puerto Rico, an overwhelming majority of 97.18% of voters expressed their desire to start down the path of statehood. The result ought to not be read as surprising, given the embrace of the fundamental values of American democracy across the island.
The case of Puerto Rico is important, because it shows that even after more than four centuries, the ideals behind the proclamation of the independent United States have not fully materialized. Following the plebiscite, Congressman José E. Serrano, who was born in Puerto Rico, celebrated the results of the plebiscite and claimed it as final proof that “Congress has a duty to listen and act upon these results so that Puerto Rico can be decolonized once and for all.” I share Congressman’s hope that the issue of the status of unincorporated of the United States be resolved soon. Even though Puerto Ricans pay in their tax dollars to the U.S. Treasury, their grievances are not heard. The path to statehood and hence representation is the only way to justify the burdening Borinqueños with the same citizenship responsibilities as other Americans.