Question: Does Puerto Rico pay income taxes?
Yes. Locally. Income for Puerto Rico sources (IRC sec. 933 income) is currently expempt from federal income taxes. However, all income is subject to social security, medicare and unemployment taxes.
They pay a Puerto Rican income tax, yet they get welfare and Social Security from the U.S. THEY ARE U.S.CITIZENS. So they need to be a STATE, and pay Federal Income tax like the rest of us poor slobs!