Funny you would say that. Turns out the attraction to Puerto Rico was manufacturers were exempt from taxes from 1976-2006 if I’m reading this right (below). To cover some of the shortfalls they raised sales tax from 7.5% to 11.5%.
So yeah. They were more prosperous, with lower taxes… go figure.
Don’t worry. There’s facts here in this calamaty to sooth everyone’s bias. From government interference, bloated public sector pensions, corrupt utilities, lobbyists, greedy wall street, crime. This story has it all!
"Puerto Rico ramped up its debt accumulation in response to an economic calamity Congress largely created. From 1976 to 1996, Puerto Rico’s economy grew steadily thanks largely to Section 936 of the U.S. tax code, which exempted U.S. manufacturers on the island from taxes. In 1996, the Clinton administration and Congress passed a 10-year phase-out of the exemption, but as The American Prospect noted, “Congress did not replace Section 936 with an economic development plan for Puerto Rico to offset the impact.”
Manufacturers left Puerto Rico in droves as the exemption faded away and the island’s economy has never really recovered."