<h2 class = 'uawtitle'>Did You Know Puerto Rico Reduced Taxes For Wealthy Foreigners?</h2><br />
<div style='font-style:italic;' class='uawbyline'>by Wanda Vaughn</div><br /><br />
<div class='uawarticle'>The press has recently widely publicized that the Commonwealth of Puerto Rico reduced taxes for rich individuals. Perhaps local leaders want to take advantage of the rising taxes irritating wealthy Americans. Certainly, the recent changes appear well timed and would be well suited for U. S. Nationals. Unlike other venues, they would not lose their nationality with an island domicile.<br />
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The new law has been broadly covered in the media. Of course, it is not surprising with such clear benefits as no tax liability on local business income and tax free capital gains for new residents. Although, the promised duration is the end of 2035, the stickler is a residency requirement.<br />
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To qualify as a resident, one needs to only stay on the island for at least 183 days each year. Income and gains derived before residency was established, but which has not been taxed yet is subject to the regular 10 percent rate. Investments prior to 2035;but after a decade of residence, will be taxed at 5 percent.<br />
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It has been pointed out this a move to the island may not be a wise proposition. The billionaire hedge fund manager John Paulson who had first announced he was considering this option has later changed his mind. Skeptics are saying he has had second thought because of the viability of this promise. There has also been discussion of the fact that this new law may have negative repercussions, such as raising the ire of the federal government.<br />
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Maintaining the benevolence of the federal government is necessary for the island. The Commonwealth is not a state, it is a possession which relies considerably on federal assistance and subsidies. This benevolence is not insignificant as it makes up about a 25 percent of its GDP. It is also a beneficiary of a special tax regime. But, this recent action has increased the chances this may not last. Some Congressional representatives have indicated an interest in harmonizing the tax treatment under comprehensive tax reforms.<br />
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Hence the specter of the United States government withholding aid to force the Commonwealth to harmonize its tax code has been mentioned in the press. The press has also raised the possibility of a default measure that will nullify its benefit. By this they mean if the island joins the union as a state. This has become a real possibility since the November 2012 referendum. In this significant action, present residents voted for statehood in the non-binding referendum. The President supports this proposition at the earliest opportunity. Right now, only partisan politics stands in the way of securing Congressional approval of statehood. The possibility is no longer remote and should be taken into account.<br />
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The partisan political roadblock may dissolve before 2016. Republicans are not eager to approve a new state whose voters would favor the Democratic Party. But, they have been considering the need to appeal to Latino voters as the white party bases ages. Changing demographics have made the Republicans realize they need to cast a wider net for voters. As many Puerto Ricans reside in Florida and Marco Rubio is being considered as potential Presidential candidate, Republicans may change their current perceptions. Statehood may become an asset rather than a political liability in this light.<br />
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Some observers have said the term required for resident status maybe too onerous for sophisticated tastes. Other have pointed out that, rising poverty caused by a reduction in manufacturing subsidies and the financial crisis have led to growing activity in drug trade and associated violence. The lure of <A href="http://www.movetopr.com">Puerto Rico reduced taxes</A> may not be sufficient for some.<br />
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