8legs: U.s. government accountability office

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A new federal report scrutinizes Puerto Rico's tax incentives luring wealthy Americans

GAO finds Puerto Rico tax incentives could amount to hundreds of millions in annual lost federal revenue, prompting IRS oversight.
IRS data gaps hinder enforcement as Puerto Rico and IRS lacked updated residency and tax compliance data.
GAO notes two major hurricanes and other crises affected Puerto Rico’s economic indicators since 2012.
Critics argue incentives widen wealth inequality and drain federal funds for programs like Social Security and Medicare.
GAO mentions ongoing independent probes into oversight by the Senate Finance Committee in 2024.
Incentives under Act 20 and Act 22 aim to attract businesses and individuals with tax breaks like 4% corporate tax or 100% exemptions on certain gains.
GAO notes Puerto Rico’s economy showed little or no growth since 2012 despite incentives.
Puerto Rico tightened compliance and raised donation requirements to bolster local benefits from incentives.
GAO provides a mixed view on jobs and tax revenue generated by Act 20 and Act 22.
GAO highlights an ongoing debate: economic benefits vs. fiscal costs.

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