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The Tax Lawyer

Not Taxing Puerto Rico? Whitewashing Impoverishment in United States v. Vaello-Madero

Francine J. Lipman


For more than four generations, since 1917, Puerto Ricans have qualified for birthright U.S. citizenship. Yet citizens residing in Puerto Rico do not enjoy the same rights and privileges of citizens residing in the fifty states and Washington D.C., but rather suffer what Justice Ruth Bader Ginsburg famously coined, albeit in the context of marriage, a “skim milk” version of citizenship. Other jurists, scholars, advocates, and politicians, have analogized the systemic discriminatory treatment of U.S. citizens residing in Puerto Rico to the racist “separate and unequal” treatment suffered by communities of color and deemed constitutional in Plessy v. Ferguson and almost sixty years later overturned in Brown v. Board of Education. This racism arises from the Supreme Court’s interpretation of the Territory Clause of the Constitution in the Insular Cases. The Territory Clause provides Congress with plenary power to “dispose of and make all needful Rules and Regulations respecting the Territory.” The Supreme Court through its decisions in the Insular Cases, dated more than one-hundred years ago, and respective progeny has generally held that the Constitution only applies to residents of the territories if Congress has specifically legislated that it applies or if the constitutional right is “fundamental.”