Tax change was more devastating to Puerto Rico than Maria

Puerto Rico has formed a unique common-wealth relationship with the U.S.

Georgie Anne Geyer
Posted 9/23/18

WASHINGTON – When you read about the tragic deaths in Puerto Rico from Hurricane Maria, you’ll find two “real” stories pulling you to tears and anger with their drama, pathos and sense of injustice.

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Tax change was more devastating to Puerto Rico than Maria

Puerto Rico has formed a unique common-wealth relationship with the U.S.

Posted

WASHINGTON – When you read about the tragic deaths in Puerto Rico from Hurricane Maria, you’ll find two “real” stories pulling you to tears and anger with their drama, pathos and sense of injustice.

From President Trump’s side, you’ll hear that only six to 18 people died as a result of berserk nature and human incompetence; the White House’s response to Maria was an “unsung success.”

From the other side, mostly from the Democrats, especially their perfervidly leftist vein, you’ll hear 3,000 people died and Trump didn’t care enough about American “people of color” to send them real help after the storm’s devastation.

But underlying the left’s criticism of Trump is something more important: the idea that Puerto Rico is a “colony” of the United States, that it is a poor creature, beautiful but frightened into obeisance, almost like a slave woman.

Typical of this were the words of Alexandra Ocasio-Cortez, the New York political up-and-comer, on CNN recently. “The relationship with the United States has led to chronic neglect of the island,” she said. “Puerto Ricans continue to be second-class citizens” because of the “colonial relationship of Puerto Rico.”

In truth, both sides see Puerto Ricans simply as poor, hopeless, hapless people who couldn’t find their way through the island’s gorgeous El Yunque forest if the devil himself were after them. 

Oh yes, they are American citizens, but they are that most incongruous of creatures – citizens incapable of thinking or acting on their own.

In reality, both of these stories are wrong. The “real” Puerto Rico is to be found in one trenchant fact that I have not seen mentioned in any of the many stories or TV coverage I have seen.

This is the fact that the 3.5 million people of the island vote regularly on their status, but they have never conclusively voted for either independence or for statehood, which they could have easily done; instead, they have continued to vote for their unique commonwealth relationship with the U.S., sometimes called “free association,” which both the Trumpists and the leftists seem to hold in such disdain.

They have repeatedly voted for ambiguity – something colonized people rarely do.

Why is this important at a bad time like this? Because now, more than ever, we need to get history right, if only to get the answers right.

You see, Puerto Rico  has long been one of America’s most fascinating and hopeful of creations.

It was called Operation Bootstrap in the beginning. The idea was that, when the U.S. took the island from Spain in 1898, it was too poor and too backward to develop without special help. 

So, in 1952, America gave Puerto Rico and other American territories special aid in the form of allowing American corporations to locate there free of federal taxes.

We more or less invented an “American commonwealth arrangement” between a very poor, but proud and striving Hispanic island society and a very rich, but problematically idealistic territorial nation. It was a brilliant way for the people of a small entity, at a vastly lower level of development, to thrive under terms that allowed for serious economic development and real protection for its own historical dignity.

And Puerto Rico did prosper, particularly as pharmaceutical plants relocated there. Between 1950 and 1980, per capita gross national product grew nearly tenfold in Puerto Rico, and disposable income and educational attainment rose sharply, according to the Center for a New Economy, a San Juan think tank.

Then, as foreign correspondent and columnist Ben Barber pointed out so well in the Huffington Post, “someone tipped over the apple cart, and in 1996, President Clinton signed into law a bill that ended the tax breaks for firms that invested in Puerto Rico.” By 2006, “the manufacturing firms pulled up stakes, joblessness spiked and poverty spread. Weekly income dipped to $500, lower than all 50 states.”

By the time the hurricane struck, the end of the Operation Bootstrap tax benefits, plus incompetent leadership on the island, led to its being $70 billion in debt, with a 45 percent poverty rate, and laid the base for today’s disaster.

Some of us remember the hopeful, idealistic past of that old Puerto Rico. But our hopes for the island will have to hold for a new political day, perhaps when both Washington and the island can think up better ways to bring different cultures into sync with modern development.

For me, that day cannot come soon enough.

Georgie Anne Geyer has been a foreign correspondent and commentator on international affairs for more than 40 years. She can be reached at gigi_geyer@juno.com.