How Puerto Rico amassed $72 billion debt

December 30, 2015 9:23 PM

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How Puerto Rico amassed $72 billion debt

1917: Congress exempts Puerto Rican bonds from all federal, state and local taxes (known as triple-tax-free status), even if bondholders live outside Puerto Rico. The government sells bonds to raise money for projects, infrastructure and operational costs.

1976: Congress gives a tax break to U.S. companies that establish subsidiaries in Puerto Rico. Petrochemical and pharmaceutical corporations flock to the U.S. territory.

Also read: Treasury secretary says a tax overhaul will be easier lift for Congress than health care

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