Posted by Olga Khazan on November 7, 2012 at 12:44 pm
Puerto Ricans voted Tuesday to change their relationship with the United States and become the 51st U.S. state in a non-binding referendum that would require final approval from Congress. The AP wrote:
The two-part referendum asked whether the island wanted to change its 114-year relationship with the United States. Nearly 54 percent, or 922,374 people, sought to change it, while 46 percent, or 786,749 people, favored the status quo.
Voters then chose among three options for their new status, and statehood won with 61 percent. “Sovereign free association,” which would have allowed for more autonomy, received 33 percent, and independence garnered 5 percent.
So, it's just a big ball of twine with no definitive answer: 66% of the 54% who wanted a change wanted a change to statehood, but the majority of voters didn't. Or other metaphysical interpretations of the results are possible, as well. A cynic might almost believe that the whole system was designed just to keep the Puerto Rico's Status issue up in the air for more profitable years to come.
It’s the fourth time in 45 years that Puerto Rico has voted on changing its national status — it’s currently a territory with U.S. currency and passports. The island governs itself, but its foreign policy is dictated by Washington. Puerto Rico fell under U.S. control in 1898, and in 1917, its people became U.S. citizens, able to serve in the military but not to vote in U.S. presidential elections.
Even though a poll published last March in a San Juan newspaper estimated that just 37 percent of Puerto Ricans wanted a status change, it seems the majority now think statehood would be the more fortuitous path.
For one thing, becoming a state would allow them to benefit from an extra $20 billion a year in federal funds – something Puerto Rico could use, given its 13 percent unemployment rate.
As a voter in the capital San Juan, Jerome Lefebre, told the BBC:
“We’re doing okay, but we could do better. We would receive more benefits, a lot more financial help.”
Puerto Rico the state would also gain two seats in the U.S. Senate and five in the House of Representatives — a major upgrade from the one non-voting delegate that currently represents the territory.
And 7 Electoral Votes, too. Puerto Ricans in the U.S. vote overwhelmingly Democratic.
“The case for statehood isn’t one of additional benefits and special treatment,” said William-Jose Velez, executive president of the Puerto Rican Student Statehood Association, told the Cronkite Borderlands Initiative. “It is one of equal treatment. We want the same benefits but the same responsibilities and rights.”
Outside observers also say that statehood would bolster both Puerto Rico and the United States. Puerto Rican residents currently don’t pay federal income taxes, and companies doing business there don’t pay corporate taxes — two loopholes that would be closed if the island were made the 51st state.
For example, Microsoft saves on billions in corporate profit taxes per year by pretending to earn almost all of their Western Hemisphere revenue from their small manufacturing plant in P.R. As I blogged in 2011:
For purposes of tax avoidance, Puerto Rico is considered, by the U.S. government, to be an untouchable foreign tax haven, because it's crucial, as Admiral Mahan explained in the 19th Century, for the U.S. Navy to hold Puerto Rico to protect the approaches to the future Isthmusian Canal from the Kaiser's High Seas Fleet and the new dreadnoughts of the Royal Navy. Or something. The U.S. doesn't actually have any military bases in P.R. these days, nor does it have the Panama Canal, but it still has lots of tax breaks for Puerto Rico. ...
Microsoft has over 40,000 employees in the state of Washington in the United States. But they don't actually physically burn on to disks the software they develop. Instead, Microsoft, has a manufacturing plant in Puerto Rico employing 185 people that gets credited in Microsoft's books with a lion's share of Microsoft's Western hemisphere revenue and profits. It's making disks that's the really important thing that Microsoft does.
Despite all you've heard about Microsoft being a software company, they are actually a manufacturing company, at least for tax accounting purposes. To the IRS, Microsoft is basically a Puerto Rican, Irish and Singaporean industrial goliath with a money-losing R&D outpost in Redmond, WA.
I can see a politically feasible compromise emerging: Puerto Rico gets statehood, gets $20 billion in more federal funds, and Microsoft et al get to keep their Puerto Rican tax breaks. It's win-win-win for Puerto Rico, the Democrats, Microsoft, and lose-lose-lose for federal taxpayers and Republicans, those racists.
“Once Puerto Rico becomes a state, its fortunes could arc upward,” writes Reuters columnist Gregg Easterbrook, pointing out that Hawaii saw marked economic growth after it was made a state in 1959.
Obviously, only racists would point out the demographic differences between the makeup of Hawaii's population (which resembles Silicon Valley's makeup) and Puerto Rico's (which resembles that of the South Bronx). (The real question for another day is why Hawaii is so economically non-vibrant despite a promising population mix. In answer to Easterbrook's analogy to Hawaii: 1959 also marked the introduction of jet airliner service to Hawaii. In summary, in the mid-1950s, Hawaii got statehood because all signs were pointing up for Hawaii, especially the onset of convenient jet tourist and business travel. Today, nobody realistically expects much out of Puerto Rico, except what they can manipulate the taxpayers into providing.)
Opponents of statehood in Puerto Rico have argued that becoming part of the United States might compromise the island’s language and culture, especially if the federal government requires it to adopt English as its sole official language (right now, it’s both Spanish and English), as a condition of its accession.
That worry prompted a 2011 presidential task force on Puerto Rico to recommend:
“Providing assurances that Puerto Rico will control its own cultural and linguistic identity would reduce concern over this possibility.”
As I said, Puerto Rican statehood can be achieved by a few simple compromises in which all interested parties get whatever unprincipled exemptions they demand and America pays the price.
The island’s fate wasn’t as wrapped up in the outcome of the presidential race, however: Both President Barack Obama and Mitt Romney have said they would respect Puerto Ricans’ statehood decision, whatever it may be.
As for me:
¡Viva Puerto Rico Libre!