Taxation without Representation: The Reality for Puerto Ricans
A brief overview of taxation without representation for Puerto Ricans on the island
I recently saw a post on CentroPR - an Instagram account dedicated to research and education for Puerto Ricans - that explained and answered the question, “Puerto Ricans Don’t Pay Taxes?” It debunked the idea that Puerto Ricans on the island don’t pay taxes and provided a report to back the proof of the incredible numbers contributed by the people on the island.
Read the full report here.
Below is a brief overview of the history between taxes and Puerto Rico:
Puerto Rico has been a U.S. territory since 1898, and its residents have been American citizens since 1917. However, despite their citizenship, Puerto Ricans do not have the same political rights as those living in the 50 states. While they contribute billions of dollars in federal taxes each year, they lack voting representation in Congress and cannot vote for the U.S. president. This unique political status has long been debated, with calls for change continuing today.
This is a modern-day example of taxation without representation.
A common misconception is that Puerto Ricans do not pay federal taxes. While residents of the island are generally exempt from paying federal income taxes on locally earned income, they still pay many other types of federal taxes. These include Social Security and Medicare payroll taxes, self-employment taxes, customs duties, and federal excise taxes. In 2022 alone, Puerto Rico’s residents contributed approximately $4.8 billion in federal taxes—an amount comparable to what some small states pay. However, unlike those states, Puerto Rico does not have voting representation in the federal government.
And it’s not just about taxes.
Puerto Rico’s unique political status as a U.S. territory significantly affects the federal funding it receives for essential social programs, leading to disparities in assistance for its residents.
Medicaid:
Medicaid in Puerto Rico differs notably from that in the states. Historically, the federal government has capped Medicaid funding for the island, providing a fixed amount that often falls short of the population’s needs. According to the Center for American Progress, as of 2021, nearly half of Puerto Rico’s residents relied on Medicaid for health coverage. Despite this high dependency, the federal matching rate for Medicaid expenditures in Puerto Rico has been lower than it would be if the island were a state. For instance, in fiscal year 2021, Puerto Rico received a 61.2% federal matching rate, whereas its per capita income would have qualified it for an 83% rate if it were a state. This discrepancy has led to limited coverage and benefits compared to those available in the states.
Supplemental Social Security:
Residents of Puerto Rico are ineligible for the federal Supplemental Security Income (SSI) program, which provides financial assistance to low-income individuals who are elderly, blind, or disabled. Instead, the island operates the Aid to the Aged, Blind, and Disabled (AABD) program, funded by a capped federal grant. According to the Center on Budget and Policy Priorities, this results in significantly lower assistance levels. In 2011, it was estimated that if Puerto Rico participated fully in SSI, over 300,000 individuals would have received an average monthly benefit exceeding $400. In contrast, only 34,000 individuals received aid through AABD, with an average monthly benefit of $58.
Nutritional Assistance:
Puerto Rico’s nutritional assistance also differs from that in the states. In 1982, the Supplemental Nutrition Assistance Program (SNAP) was replaced in Puerto Rico by the Nutrition Assistance Program (NAP), a block grant with funding levels set below what the island previously received. This change resulted in reduced benefits and stricter eligibility criteria. By 2018, 43% of Puerto Rico’s residents and 57% of its children lived in poverty, highlighting the critical need for robust nutritional support.
These funding disparities across essential programs underscore the challenges Puerto Rico faces due to its territorial status. Despite contributing to federal programs through various taxes, residents receive unequal support compared to their counterparts in the states.
On the political side, Puerto Rico has one representative in Congress—the Resident Commissioner—but this person cannot vote on final legislation. Puerto Ricans also can’t vote for president, even though federal policies directly impact their lives.
Read more about Puerto Ricans and the Presidential elections here.
Puerto Rico pays taxes, sends its people to war, yet for over 3 million U.S. citizens on the island, they lack representation.
Part of the reason is political inertia—Congress has long ignored Puerto Rico’s status. Efforts to change Puerto Rico’s political status have been ongoing for decades. The island has held multiple referendums to gauge public opinion on statehood, independence, and the current territorial status. In recent years, a majority of voters have supported statehood, but Congress has not taken action to change Puerto Rico’s status. The issue remains a subject of debate, with different perspectives on the best path forward.
This has real consequences.
Hurricane Maria, which struck Puerto Rico in September 2017, caused unprecedented devastation, highlighting significant challenges in the island’s recovery efforts and its complex relationship with the federal government. The hurricane resulted in approximately 3,000 fatalities and caused severe damage to infrastructure, including the longest blackout in U.S. history. Hundreds of thousands of homes were destroyed or significantly damaged. In response, the federal government allocated approximately $62 billion for disaster relief, but as of August 2022, only about $19.8 billion (32%) had been disbursed.
Federal aid distribution has faced numerous obstacles. As of June 2023, FEMA awarded $23.4 billion for permanent recovery work related to hurricanes Irma and Maria, as well as the 2019 and 2020 earthquakes, but only $1.8 billion had been spent due to bureaucratic delays. Additionally, the Department of Housing and Urban Development allocated $20.2 billion in Community Development Block Grants for disaster recovery, but delays in fund release and federal oversight slowed the process.
Several factors contributed to these delays. Puerto Rico’s recovery efforts were hindered by complex administrative procedures and additional layers of federal review, which are not typically applied to U.S. states. Pre-existing vulnerabilities in the island’s infrastructure, particularly its power grid, further complicated restoration efforts. Political dynamics also played a role, with reports suggesting that Puerto Rico did not receive the same level of federal support as states affected by similar disasters.
As of early 2025, Puerto Rico continues to face challenges in its recovery. While significant progress has been made, many infrastructure projects remain incomplete, and the power grid still experiences vulnerabilities. The prolonged recovery process has also had lasting effects on the island’s economy, impacting employment and public services. The aftermath of Hurricane Maria underscores the disparities in disaster response between U.S. states and territories. Addressing these challenges requires efforts to streamline aid distribution, ensure equitable treatment, and strengthen Puerto Rico’s resilience against future disasters.
It all comes down to fairness. Puerto Ricans serve in the military, pay taxes, and contribute to America in countless ways. They deserve the same rights and representation as any other U.S. citizens. The fight for Puerto Rican statehood—or at the very least, equal political rights—shouldn’t be about party politics. It’s about ending a long-standing injustice.
The U.S. was founded on the idea that there should be no taxation without representation. So why does Puerto Rico still live under those exact conditions?
I’d love to hear from you….