>“I’m worried people are going to misinterpret our actions,” Mr. Pierce said. “That we’re just coming to Puerto Rico to dodge taxes.”
Then just a few paragraphs later...
>“So, no. No, I don’t want to pay taxes,” Mr. Collins said. “This is the first time in human history anyone other than kings or governments or gods can create their own money.”
>“When Brock said, ‘We’re moving to Puerto Rico for the taxes and to create this new town,’ I said, ‘I’m in,’” Mr. Collins said. “Sight unseen.”
> "This is the first time in human history anyone other than kings or governments or gods can create their own money"
So-called "free banking" where banks issued their own currency and convertible debt instruments was quite popular before the 20th century. And there have been a few places issuing local pseudo-currency (Bristol Pound et al).
The article hit the nail on the head: "crypto colonialism".
I mean, say what you will about these newly-found billionaires, but one thing is for sure: they aren't helping anyone except themselves. They get a bunch of money dumped into their lap from thin air (literally), and the first thing they do is go to a place that was just leveled by natural disaster and with a shattered economy, and buy up cheap land for their own personal playground.
I mean. Wow. Tone deaf doesn't begin to describe it.
That’s actually not true. This article doesn’t show it, but they are doing a ton of good for the whole island. There are projects for the good of the whole island focused on power (solar + Blockchain), agriculture, healthcare, real estate, and education. You don’t need to take my word for it - you’ll see in the coming months. The people of PR and the gov’t of PR love that these people are there, and the whole island will benefit,
This feels like some crazy fantasy land. What are they really going to achieve down there? Seems like a bunch of people with way too much money and way too little direction. Does anyone disagree?
...on the other hand, one can certainly be a little jealous of the ability to be so aimless :).
"Puerto Rico offers an unparalleled tax incentive: no federal personal income taxes, no capital gains tax and favorable business taxes — all without having to renounce your American citizenship."
As a note - Residents of US Territories pay territorial personal income taxes instead of federal personal income taxes. In the US Virgin Islands, for example, the tax rates are the exact same, as the USVI tax code mirrors the US Tax Code. The same amount of money leaves your bank account, it just goes to the territory instead of the fed - you even use the exact same Form 1040.
> So the IRS can tax Americans everywhere in the world except Puerto Rico?
Congress passed some tax laws to incentivize "investment" in Puerto Rico. They haven't been particularly effective.
The reason that they passed these tax laws is because they wanted to try something to boost the Puerto Rican economy that did not involve addressing the underlying issue for why Puerto Rico's economy has stagnated for decades. Repealing the Jones Act would fix most of these problems, but the Jones Act is politically popular with major Democratic supporters, and Republicans (as a party) tend not to care about Puerto Rico, so the initiative to repeal it never went anywhere.
In the end, there's no amount of tax incentivizing that can make up for the costs that the Jones Act imposes on the Puerto Rican economy, which is why the tax laws didn't halt the brain drain. Of course, the failure to provide effective disaster relief in Puerto Rico this past year hasn't exactly helped either.
The Jones Act creates artificial scarcity in the shipping industry, boosting the demand for jobs in ships that are unionized by Democratic-supporting groups: namely the AFL-CIO.
The AFL-CIO has lobbied heavily not just against repealing it entirely, but even against temporarily waiving it for relief in Puerto Rico, the way it has been temporarily waived for relief in basically every recent natural disaster (including in Houston after Harvey).
"The domestic shipping industry is an economic behemoth in Florida, contributing 52,140 maritime jobs and $9.6 billion to Florida’s economy, according to a 2014 study by PricewaterhouseCoopers. The Port of Jacksonville is the nation’s hub for Jones Act shipping to Puerto Rico, and Florida ranks second among all states in jobs affected by the domestic maritime industry."
"The following items shall not be included in gross income and shall be exempt from taxation under this subtitle...In the case of an individual who is a bona fide resident of Puerto Rico during the entire taxable year, income derived from sources within Puerto Rico (except amounts received for services performed as an employee of the United States or any agency thereof)..."
The "subtitle" in question is is 26 U.S.C. Subtitle A, i.e. the Income Taxes subtitle [2].
Disclaimer: I am neither a lawyer nor a tax specialist. This is not advice of any kind. Do not interpret my Internet commentary as legal or tax advice.
Its Act 20 act 22. Basically, you can avoid paying personal income tax and capital gains by becoming a resident of Puerto Rico (I.E. living there for a documented 183 days out of the year). Also incorporating in PR and hiring at least 2 locals you will qualify you for substantial benefits as well. It's honestly one of the best places to be as an investor or anyone starting an internet based company from a tax savings and financial standpoint.
Then just a few paragraphs later...
>“So, no. No, I don’t want to pay taxes,” Mr. Collins said. “This is the first time in human history anyone other than kings or governments or gods can create their own money.”
>“When Brock said, ‘We’re moving to Puerto Rico for the taxes and to create this new town,’ I said, ‘I’m in,’” Mr. Collins said. “Sight unseen.”