It was with the cry No taxation without representation that the rebellious English colonists embarked on the American War of Independence, but two centuries and a decade or so later, the cry coming up from America’s own biggest colony could well turn out to be No representation if it means taxation. That colony is of course the Caribbean island of Puerto Rico, which mutely shames all Americans that exhort other colonial powers for not granting independence to their tiny remaining foreign fiefdoms by the fact that it still does not have statehood. Finally, a bill is to be presented in Congress by the Senate Finance Committee that will, if passed, give Puerto Ricans the opportunity to vote in 1991 on whether they want to become the 51st state of the Union, cast off the shackles of the United States altogether and opt for full independence, or maintain their present colonial status, euphemistically known as commonwealth status. And in what would come as a surprise to all those who delight in pontificating to other countries of which they know little on how they should order their affairs, it is far from certain that the Puerto Ricans, given the chance, will vote to cast off the shackles of serfdom and breath the clean air of freedom. Whatever has the future of Puerto Rico got to do with Computergram readers? The answer is that scores of computer and electronic companies have manufacturing and assembly plants down their – not because they are altruistically dedicated to bettering the lot of the poor colony or because the Puerto Ricans represent an unrivalled workforce. No, it’s because Uncle Sam exempts all Puerto Rican subsidiaries of US companies from Federal taxes. And if Puerto Rico votes to become a state, that will be the end of the subsidy: the current proposal is to phase it out over seven years. And that would be serious both for the 144 companies that benefit, and for the 23,000 people, 14.2% of the manufacturing workforce, that they employ, producing 7% of the islands annual exports. Among the companies down there are DEC, Hewlett-Packard Co, Motorola Inc, General Electric Co and General Instrument Corp. If statehood comes, they say, they may not up sticks and go elsewhere, but they are not likely to expand their operations.
