And here's another one goes the way of the dodo. America's Greece basically, more importantly -- US territory (half-arsed, yes, but territory nevertheless):
http://www.nytimes.com/aponline/2015/06/29/world/americas/ap-cb-puerto-rico-economy.html

AFAIR, Puerto-Rico doesn't have a federal income tax, so no surprises government is bankrupt. Yet despite minimum taxation that exists there investors aren't rushing to invest. Rudimentary industrial sector, education is one of the worst within the US. Population peaked and currently at 1990s levels, every year around 50k escape Puerto-Rico to the mainland US.

P.S. Very much reminiscent of the Baltic states after Soviet era to me with more or less the same resutls, depressed terriotry owned by foreign banks, younger people escpaing territory at accelerating rate with only hope to settle abroad. With only one exclusion, communists did bother to build industry for Baltic states, which they've destroyed in less than 20 years of "eurointegration", smth that capitalists never did for Puerto-Rico as they're pretty comofrtable with barely educated migrant workers running for better life to the US. Bwa-ha-ha :D

Puerto Rico not being applicable to the federal tax rate shouldn't have any effect on its own budget.

That situation is a complete piss-take, as Americans living and working ANYWHERE else in the world are subject to income taxes, PR is the only exemption, IN THE WORLD.

Crazy.

The topic at hand: you could see this coming a mile off. Huge public sector, with unsustainable benefits. Just like Greece.

So the US has to bail them out like greece by EU? Pretty interresting

It's confusing. They have to declare their income anywhere else in the world. Each year, the US Gov't sets a level at which expats don't have to pay tax on, usually around 100k USD. You can then also deduct the tax you paid in that foreign country.

So, an American living in Britain earning £150,000 a year. In the UK, that will roughly be £90,000 after tax and insurance. £90k is ~$140k. You then deduct the 100k that the American gov't "allows", meaning that you will have to pay tax on the $40k (which will probably be zero or very low).

Contrast with an American living in Hong Kong on the same wage, where the post tax income would be about £135k, or $215k. After the foreign deduction, the tax would still be on $115k, which will be a substantial amount of money.

EDIT: What makes the situation even worse is that, actually, the US Gov't also does this to their corporations. American corporations have to pay corporation tax on their profits made in other countries. Apple selling Chinese made iPhones in the UK, the American Gov't takes a slice of that! America is the only country in the world that does this (I think there's a couple of other small South American countries that do the same), and it also has one of the highest corporate tax rates in the world.

thats just true if they take their money back to the US.  thats why some US corps have huge money reserves in irland( low tax).

Bail us out? Ha! By the looks of it, they don't want to touch us with a ten foot pole. Especially when our brilliant governor told the news the $70 billion debt was unpayable.

How to make $30 billion and pay no corporate income tax, the Apple way

boo hoo,...

Puerto Rico is not a "half-assed" territory, the Commonwealth of Puerto Rico is an unincorporated territory.

The majority of Puerto Ricans, combining those who want Puerto Rico to become the 51st state of the United States and those that want Puerto Rico to be independent, want this colonial status to finally end.

The exodus of Puerto Ricans is led by professionals. Puerto Rico is bleeding professionals and not "barely educated migrant workers" which makes the situation even more dire.

http://usatoday30.usatoday.com/news/nation/story/2012-03-11/puerto-rico-economy-brain-drain-exodus/53490820/1

Recently we had people from the US coming here looking for teachers, police officers and people to work for the border patrol. They always seem very interested in looking for bilingual workers who can help with their Spanish to deal with the increasing Spanish speaking population in the US.

Most Puerto Ricans are subject to the Commonwealth taxes but those who work for the US armed forces and for Goverment of the US here in Puerto Rico do present federal income taxes.

Adminitration after administration have used jobs in the public sector as an exchange for votes and support and who the hell knows what else.

it shouldn't.  you can't be taxed from the same income in 2 different countries and even if you have to file federal income tax, there is a credit called foreign tax credit for that reason.

you nailed it.   You sum up everything I wanted to say.