From: Erik Reuter <[EMAIL PROTECTED]>
How about some numbers?
Why not? Take your pick. You have infinite choices!! JUST KIDDING! ;-) (A little math humor..)
What percent of your income goes to various taxes (social security, medicare, equivalent of Federal income tax, equivalent of state income tax, etc.) and what percentage of a purchase price is sales tax?
"Erik Reuter" <[EMAIL PROTECTED]> http://www.erikreuter.net/
I have to admit the last place *on Earth* I thought I'd end up discussing my Income Tax return was on a SciFi themed mailing list. But hey, it's Saturday nite. I can kick back for a while.
If I use my experience as a frame of reference, roughly 9.22% from the monthly paycheck goes to Social Security and Medicare, while only 7.5% go to local state taxes. This amounts to a deduction of a 16.72% from your salary in tax related discounts alone, which is not taking into consideration the calculations that are finalized when you file your tax return and the deductions to which you may be eligible or not, depending on your bracket, etc. From my experience, at the time you file the tax return, you end up paying a little bit more which takes it around to (approximately) one third of your yearly salary. And that's A LOT.
As far as tax-related mark-ups for prices of articles, my guesstimate is that it would be somewhere in the vicinity of the 3 to 9 percent (and maybe a little higher), depending on the article and where it comes from.
Our current trade agreement needs a little working, too. For example, products like Tylenol or Bausch&Lomb Contact Lens Care Products are produced in PR, but you can't appreciate a difference in price that would reflect the fact that they are manufactured locally, as one would normally come to expect. A 50 pill bottle of Tylenol PM Extra Strength Gelcaps can go up to $6 or more, and it is manufactured HERE. This is irrelevant of where you buy.
Such is the case of, for example, expensive clothing lines which may be mass-produced overseas where they are usually available at the fraction of the price they retail in the States & PR. For a more clear example, I believe that in Mexico you can obtain a decent Volkswagen for ridiculous prices, because they are manufactured there. Isn't that the case of the BMW in Germany and Europe? In contrast, those products for us are status symbols of the upper classes.
I guess statehood would end a lot of financial woes. Like I mentioned before, this island is by no means self-sufficient. Most pro-independence supporters claim that "oh, we can produce enough with the land we have to sustain the island's economy". This is a pathetic claim. Agriculture has been all but abandoned, due to the fact that the former trade agreements that made us top suppliers of products like sugar or coffee have been overturned, or our competition from new markets has just gone way over our production numbers.
Another big headache in the economic horizon for Puerto Rico is Cuba.
There is a big, big possibility that in the near future trade lines between Cuba and the US may be re-established to the way they were before Castro took over. Castro's death may bring this, or he may just have to give in and admit to the choke-hold the current restrictions imposed by the US have in Cuba, and force him to open up to a more democratic trend of government.
And if that happens, may God have mercy on PR. Hand labor in Cuba will be infinitely cheaper, just as it is in the Dominican Republic. Workers in PR have obtained something called "rights", which they have obtained as being under the umbrella of the US Constitution.
Rights that regulate minimum wage, for example, are nonexistent in countries/islands like Cuba or the Dominican Republic. The very few tax exemptions we had, by way of our prior agreements with the Federal government have simply expired in the light of REALLY bad political decisions from the part of government factions in PR that want to see the commonwealth dismembered.
Therefore, Cuba may end up being the haven it was for american commerce, and that would certainly spell doom for PR economy.
I also have to admit I don't have the information that has been distilled from the economists' analysis which explain why statehood would be better, financially, for the average PR citizen. At least, at this time. I could dig it up for the sake of the discussion, but it will take me a couple of days.
P.R.... The Shining *Star* of the Caribbean... :-(
JJ
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