Puerto Rico: Greece of the U.S. economy?

[piston]

If you read this, Dulcinea, you can vent here as much as you want!

If Puerto Rico defaults, how is that going to play out? It's a tad bigger than Detroit!

Puerto Rico has been burdened for years with a sluggish economy and a high debt load, and warned in a report this month that it “may lack sufficient resources” to fund government programs and pay its debt in the upcoming fiscal year. Puerto Rico has been negotiating with creditors, but it is unclear whether the talks will allow the island to avoid what could rank as one of the largest municipal defaults ever.

http://www.wsj.com/articles/assessing-b ... 1431293911
President: Barack Obama
Governor: Alejandro Garcia Padilla
Population: 3,667,084
GDP per capita: 44th

In comparison to the different states of the United States, Puerto Rico is poorer than Mississippi (the poorest state of the U.S.) with 41% of its population below the poverty line. However, when compared to Latin America, Puerto Rico has the highest GDP per capita in the region.

Wiki

[living_stradivarius]

American citizens who live in Puerto Rico for 180 days of the year pay 0% capital gains tax. Very tempting!

[piston]

Do you know if the IRS has jurisdiction in this unorganized territory? Chronic tax evasion is the common theme with Portugal, Italy, Greece....

[living_stradivarius]

http://www.forbes.com/sites/laurengensl ... tax-haven/

[piston]

Thanks!

Yes, this is legal. While the U.S. asserts a sweeping right to tax citizens’ income wherever they live and wherever it’s earned, Section 933 of the tax code exempts residents of Puerto Rico from paying U.S. income tax on their Puerto Rico-sourced income. Instead, the Commonwealth of Puerto Rico has the exclusive right to tax local income as it sees fit.

Well, so long as we, US tax payers in organized territories, don't spend a penny to fix P.R.'s juvenile fiscal irresponsibility, I'm fine with their claim to taxation sovereignty.