From a Caribbean Business interview with Puerto Rico’s Secretary of Economic Development and Commerce Alberto Bacó:
“We are attracting high-income, well-educated residents,” he said during a forum with University of Puerto Rico business school alumni. The official said the government fielded roughly two dozen petitions in both April and May from rich people seeking to tap incentives for relocating to Puerto Rico. “I have met with billionaires. These aren’t people who go to a bank seeking a loan. These people have their own capital to invest,” Bacó said according to media reports. Bacó cited Nicholas Prouty, president of Putnam Bridge Investments, who is relocating to Puerto Rico …
Law 22 is designed to primarily attract to Puerto Rico high-net-worth individuals, empty nesters, retirees who currently relocate to other states and individual investors from the U.S. and other countries, by eliminating all taxes on passive income that accrues after they relocate to the island. While dividends and interest income earned by Puerto Rico residents on U.S. securities are generally taxed by the federal government, capital gains taxes on their sales are based on residence.
So if you lived your whole life in the Homeland and have millions of dollars in unrealised capital gains from U.S. investments, the U.S. Congress and the Puerto Rican government will cooperate to make sure you don’t have to pay a penny of tax. But if you’re an Australian with an American mother and a Superannuation plan, the U.S. will make you waste 55 hours per year filling out a form even accountants have trouble understanding to tax you on retirement savings which the Australian Parliament voted should be tax-free.
The reason for this, of course, is that All Americans (besides the ones who move to Puerto Rico) Must Pay Their Fair Share for the Benefits of Citizenship in the Greatest Country on Earth, and if you decide that you don’t want those Great Benefits, then you’ll be exiled permanently. I guess because there’s no U.S. embassy in Puerto Rico, those poor deprived Homelanders living there don’t get any of those Great Embassy Services like us U.S. Persons abroad.