This doesn’t make it democratic, as PR is still bound by many laws made in Washington, but it is at least the one place where US citizens are free from personal tax obligations to the IRS, as far as I’m aware. The actual taxes while living overseas are often negligible or far lower due to the FEIE threshold, but in PR they don’t apply at all.
Act 60 is fairly limited in scope, and you can only get tax breaks on a couple things. All other income may not be subject to federal taxes, but you will pay Puerto Rican taxes, which may even be higher than federal taxes.
Residents of states also pay state taxes, and in high tax states those can exceed federal taxes so the "they also pay Puerto Rican taxes" line doesn't get them off the hook in any way.
I mean to say state on down, including property taxes, sales tax, gasoline taxes, local payroll taxes. Could be wrong but if you had a house that went up in value over the past few years I could see a situation where the federal income tax you pay is less than your property tax bill alone.
Edit: The more I think about it the very poor pay no federal income tax and the struggling pay very little, they could easily exceed it with cigarette or alcohol taxes for example.
Act 60 seems like a limited tax incentive scheme. I'm referring to the general clause that income of Puerto Rican residents sourced in PR is not subject to personal income tax. From your linked source:
> The U.S. tax code (Section 933) allows a bona fide resident of Puerto Rico to exclude Puerto Rico-source income from his or her U.S. gross income for U.S. tax purposes.
Interestingly American Samoa is only loosely bound to constitution / Washington.
AFAIK it's the only territory/state with institutional laws that expressly protect racism and sexism. For instance, only ethnic Samoans can control most of the property, and on one island women are barred from certain leadership positions for 'cultural' reasons.
And people from American Samoa, as "nationals" but not citizens, can't even vote AFTER they come to the mainland (unlike Puerto Ricans). Interestingly you rarely hear social justice warriors fighting against the racism/sexism of American Samoa nor the racism that stops them from voting on the mainland -- happening by statutory decree within US borders.
