Please register to participate in our discussions with 2 million other members - it's free and quick! Some forums can only be seen by registered members. After you create your account, you'll be able to customize options and access all our 15,000 new posts/day with fewer ads.
The Jones Act unnecessarily increases the costs of many goods. A large amount of US territories are islands with PR being the largest one, so a high cost of living is par for the course. What isn’t typical for islands is to have their already high cost of living be even more expensive by a law.
it actually affects new england as well since NYS will not permit a gas pipeline they have to import oil and gas, since jones act ships don't even exist for such a purpose, oil and gas is shipped from trinidad. not coincidentally power prices in new england are far higher than the mid atlantic and much more in line with PR. for ports the law artificially depresses port activity since domestic shipping is more or less non-existent.
Now I heard it all. The prices in New England like Massachusetts are more expensive than the Southern states because of the Jones Act. What does those states have in common? They all have very liberal progressive governments that raises the cost of living with heavy taxation and regulations. If they could tax the air they breath, they would. They will get there. Working on it.
I guess We don't have a transportation or energy issue in Utah and the Mountain West. We live off the mountains. We are still riding on horses and wagons and walk for the ones that can't afford a horse and keep warm in the long winters with wood and hugging each other tight.
You have a better shot at cutting taxes and regulations and give tax credits to taxpayers than getting rid of the Jones Act especially with the Democrat Party. They are very tied with the unions.
Can somebody do a comparison of Puerto Rico and the rest of the islands in the Caribbean and Hawaii and the rest of the islands in the Pacific before We start chopping off arms and legs of the U.S. System of over 1 century.
I put the example with the Dominican Republic, who is next door to Puerto Rico and are not under the U.S. jurisdiction of the Jones Act with real cost of living of products that are imported to the islands from the outside and the purchasing power, gas prices and credit and nobody here can explain. It's the same for the rest of the islands in the Caribbean.
Why is that? Shouldn't they have a bigger purchasing power. Should cars and gasoline be less in those countries? Should products that travel from American ports be cheaper and easier to access in those countries than Puerto Rico? They don't have to follow the Jones Act but it's more expensive than Puerto Rico. Why is that? Can anybody take a crack at it? I know why and the reason 97% of Puerto Ricans in the island reject independence but anyone here can take a crack.
Can somebody do a comparison of Puerto Rico and the rest of the islands in the Caribbean and Hawaii and the rest of the islands in the Pacific before We start chopping off arms and legs of the U.S. System of over 1 century.
I put the example with the Dominican Republic, who is next door to Puerto Rico and are not under the U.S. jurisdiction of the Jones Act with real cost of living of products that are imported to the islands from the outside and the purchasing power, gas prices and credit and nobody here can explain. It's the same for the rest of the islands in the Caribbean.
Why is that? Shouldn't they have a bigger purchasing power. Should cars and gasoline be less in those countries? Should products that travel from American ports be cheaper and easier to access in those countries than Puerto Rico? They don't have to follow the Jones Act but it's more expensive than Puerto Rico. Why is that? Can anybody take a crack at it? I know why and the reason 97% of Puerto Ricans in the island reject independence but anyone here can take a crack.
DR has high import duties and many things considered “luxury” have an additional tax imposed on them. That’s why certain things like cars actually cost around 30% more in the DR than in the USA after all taxes are included. Actually, anything that is imported is more expensive than the same in the USA. The thing is that most things that are produced domestically are very cheap.
The last part comes full circle pertaining Puerto Rico and the Jones Act, because technically everything produced in the US mainland is domestic in Puerto Rico. Yet, things like the Jones Act help make them more expensive in PR than stateside and often compared to several other Caribbean neighbors regarding their domestically made stuff.
Btw, in the DR people actually get to keep around 80% of their income while in the USA it ranges around 60%. In much of Europe how much is kept by the income producers is even less than in the USA. This is after all taxes, including income tax, are taken into account. Many times the DR has high tax figures (sales tax is 18% to give one example), but when all taxes are added you realize it’s less than in the USA or even than in much of Latin America since the DR often figures with the countries with the lowest tax pressures on income. The USA has lower tax rates, but they have significantly more taxes. In the end, peopke end up giving more of their income to the government.
...
The last part comes full circle pertaining Puerto Rico and the Jones Act, because technically everything produced in the US mainland is domestic in Puerto Rico. Yet, things like the Jones Act help make them more expensive in PR than stateside and often compared to several other Caribbean neighbors regarding their domestically made stuff. ..
worth noting that it makes domestic goods more expensive relative to imports which can be delivered on non-jones act ships. that's true in reverse as well, things produced (exports) in PR are going to be relatively more expense just based on shipping costs alone.
DR has high import duties and many things considered “luxury” have an additional tax imposed on them. That’s why certain things like cars actually cost around 30% more in the DR than in the USA after all taxes are included. Actually, anything that is imported is more expensive than the same in the USA. The thing is that most things that are produced domestically are very cheap.
The last part comes full circle pertaining Puerto Rico and the Jones Act, because technically everything produced in the US mainland is domestic in Puerto Rico. Yet, things like the Jones Act help make them more expensive in PR than stateside and often compared to several other Caribbean neighbors regarding their domestically made stuff.
Btw, in the DR people actually get to keep around 80% of their income while in the USA it ranges around 60%. In much of Europe how much is kept by the income producers is even less than in the USA. This is after all taxes, including income tax, are taken into account. Many times the DR has high tax figures (sales tax is 18% to give one example), but when all taxes are added you realize it’s less than in the USA or even than in much of Latin America since the DR often figures with the countries with the lowest tax pressures on income. The USA has lower tax rates, but they have significantly more taxes. In the end, peopke end up giving more of their income to the government.
Ahhh, We are getting somewhere in this conversation. So taxes, regulations,demand, credit and currency has a lot to do with the price of goods not just the Jones Act, which the D.R. are not under the U.S. laws. So getting rid of the Jones doesn't guarantee the prices of good to go down or taxes and regulations to go down. The government, local or federal will find a way to control their domestic routes and commerce. There are a lot more pieces that people ignore here about prices of goods and purchasing power.
Can you name a product that comes from the U.S. cheaper in the R.D. than Puerto Rico? I tried but I can't find 1, from household goods to electronics, to gas and cars. I tried it in Central America and South America and nothing. Their purchasing power is a lot lower than Puerto Rico and We are not just talking about other islands but big full countries in the mainland that are the U.S. or Canada.
You say the D.R. people get to keep around 80% of their income. When they make 90% less salary than the U.S. plus they pay double mortgage rates than Americans (including P.R.) , they have to keep 80% of the littLe they earn or they will die. Trust me, if the socialists in the government in the D.R. can tax them more, they would but they would starve them all to death or have another revolution.
Now back to the topic, why does Puerto Rico gets more of their goods from the U.S. mainland? It has everything to do with credit and protection. Puerto Rico has it while D.R. and the rest of the Latin Republics doesn't.
DR has high import duties and many things considered “luxury” have an additional tax imposed on them. That’s why certain things like cars actually cost around 30% more in the DR than in the USA after all taxes are included. Actually, anything that is imported is more expensive than the same in the USA. The thing is that most things that are produced domestically are very cheap.
.
Why is that? Very cheap labor and weak currency. If you hire service in Puerto Rico compare to D.R., you are going to pay a lot more because their not paid the same. The min. wage in Dominican Republic is $1.14 an hour. The average monthly salary in Puerto Rico is 77% higher than D.R. So their domestic production will be a lot cheaper in D.R. by far. The problem with that is that is they have a low purchasing power. When they have 3 times higher the mortgage interests rates than Puerto Rico, they have a problem. The banks makes it harder to lend in D.R.
Ahhh, We are getting somewhere in this conversation. So taxes, regulations,demand, credit and currency has a lot to do with the price of goods not just the Jones Act, which the D.R. are not under the U.S. laws. So getting rid of the Jones doesn't guarantee the prices of good to go down or taxes and regulations to go down. The government, local or federal will find a way to control their domestic routes and commerce. There are a lot more pieces that people ignore here about prices of goods and purchasing power.
Getting rid of import duties to American imports in the DR correspond with their ability to compete more efficiently with locally made products of the samething. Why eliminating the Jones Act in PR, which increaes costs of many things, not produce a decrease of prices either by the prices themselves decreasing or they remaining the same but increasing at a slower rate, which in the long term is essentially the same as lowering prices?
Quote:
Originally Posted by SanJuanStar
Can you name a product that comes from the U.S. cheaper in the R.D. than Puerto Rico? I tried but I can't find 1, from household goods to electronics, to gas and cars. I tried it in Central America and South America and nothing. Their purchasing power is a lot lower than Puerto Rico and We are not just talking about other islands but big full countries in the mainland that are the U.S. or Canada.
US products aren’t domestic in the DR, but they are in PR. Many of the US import have local brands that compete with them and usually they are cheaper than the imports. For example, the average food prices for things of local productions, which is most of the foodatuff, are cheaper thsn their counterparts in PR. Things like Kiwi may not be cheaper, but the DR produces the grand total of 0 Kiwis, all are imported.
There is some agricultural production that is exclusively to be exported to PR because in many cases PR doesn’t produces them and they are cheaper than their counterparts domestically imported from the US mainland.
Many US products are seeing a reduction in prices due to things like DR-CAFTA which is a free trade agreement between several countries in Central America, the DR and the USA. One of the main features of this agreement is the gradual reduction of import duties on American products (naturally this also applies to products made in PR.) These are accompanied with reduction of import duties in this case Dominican products exported to the USA and/or Central America.
One of the things that were unforseen was what happened eith the Dos Pinos brand which I think is originally from Costa Rica. After DR-CAFTA started, they entered the DR market and everything they produced (milk, juices, etc) were imported from Costa Rica. They effectively were competing with Dominican made brands of the same products and were seeing an increase in market share year after year. Did this meant that in this case Dominican products were going to be replaced by imports? Well, not quite. The Dominican family that had the representation of Dos Pinos in the DR were gradually buying more shares of the Costa Rican company. Now supposedly they are the main shareholders of that company. Guess what has been their first step? They built a manufacturing plant near Santo Domingo where many of the Dos Pinos products distributed and sold in the DR are no longer imported from Costa Rica, but rather made in the DR. That wouldn’t had happened if Dominicans were not taking an ever larger slice of ownership of the Costa Rican company. Once their clout became relevant, a more pro-DR stance begand to be seen in the company. There are plans to even export some of the Dominican production of Dos Pinos. I wouldn’t be surprised if PR will be one of those places in the near future, if they aren’t doing that already.
This is an interestibg case because shen DR-CAFTA was signed, no one thought a foreign company would have a greater Dominican influence as time goes on. Dos Pinos has gone from essentially all foreign products in the DR to realky Dominican domestic products. Many of the labels now says “Hecho en República Dominicana.”
Quote:
Originally Posted by SanJuanStar
You say the D.R. people get to keep around 80% of their income. When they make 90% less salary than the U.S. plus they pay double mortgage rates than Americans (including P.R.) , they have to keep 80% of the littLe they earn or they will die. Trust me, if the socialists in the government in the D.R. can tax them more, they would but they would starve them all to death or have another revolution.
Income taxes aren’t levied on the full income. There is a threshold where up to that point income taxes are 0. Only the amount after that beging to pay income tax and only on those amounts. Dominicans that pay incone tax are high inclme earners and in those levels their standard of living is higher than their counterpart not just in Puerto Rico, but also in the USA.
In addition to that, remember that purchasing parity isn’t the same in both islands. It’s impossible that US$1 earned in the DR is anle to buy as much as US$1 earned in PR. A less amount actual is the equivalent of a higher income in PR, hence standards of living tends to be higher in the DR than in PR particularly when referring to the upper middle class and upper class. Many Puerto Ricans actually notice this and that is one of the reason why quite a few retire in the DR vs in PR.
In addition to that, any income made outside the DR while living in the DR is tax freeincome regardless of the amount. Many people are actually making money via online and social media all tax free. Given the higher purchasing power parity of $1 in the DR vs say in the US, many people are basically living a nice comfortable lifestyle in the DR with an income that in the USA will relegate someone to low income groups that have to depend on government programs to make ends meet. This is because making say $20K in the DR isn’t truly equivalent of making $20K in the USA, it is much higher than that.
Quote:
Originally Posted by SanJuanStar
Now back to the topic, why does Puerto Rico gets more of their goods from the U.S. mainland? It has everything to do with credit and protection. Puerto Rico has it while D.R. and the rest of the Latin Republics doesn't.
The main reason is that ever since the US took control of Puerto Rico in 1898, PR has essentially a free trade with American products. This wouldn’t happen, particularly on the things that have domestic production, before domestic companies are mature enough to compete with the usually much larger, more powerful and with access to more money US mainland based ones.
A perfect example would be hypermarkets such as Walmwrt, Target, etc. Almost all of them in PR are really US mainland based companies and they have done to PR something they can’t do in the US mainland, trat the sector as an oligopoly. This increases prices and, in fact, companies like Target have their most profitable stores in PR despite they are in just about all 50 states and all of them have a higher average incone and purchasing power parity than PR. I don’t know if this is still the case, but for many years these companies prevented Puerto Ricans in PR from buying from their websites, since the prices for many things are cheaper there than in the stores they have in PR. The prices in their websites correspond with what they can’t do in the US mainland. Then there are other things such as the Jones Act that further increases prices for things these stores sell in PR.
Getting rid of import duties to American imports in the DR correspond with their ability to compete more efficiently with locally made products of the samething. Why eliminating the Jones Act in PR, which increaes costs of many things, not produce a decrease of prices either by the prices themselves decreasing or they remaining the same but increasing at a slower rate, which in the long term is essentially the same as lowering prices?
and how is that working out for Dominicans? They have a 65% lower purchasing than Puerto Rico and they have a bigger underground economy than P.R.
Quote:
Originally Posted by AntonioR
US products aren’t domestic in the DR, but they are in PR. Many of the US import have local brands that compete with them and usually they are cheaper than the imports. For example, the average food prices for things of local productions, which is most of the foodatuff, are cheaper thsn their counterparts in PR. Things like Kiwi may not be cheaper, but the DR produces the grand total of 0 Kiwis, all are imported.
What domestic Dominican products competes with the U.S.? Cars, electronics, software, hardware? Apart from domestic food and cheap service, there isn't much of a competition.
Quote:
Originally Posted by AntonioR
Income taxes aren’t levied on the full income. There is a threshold where up to that point income taxes are 0. Only the amount after that beging to pay income tax and only on those amounts. Dominicans that pay incone tax are high inclme earners and in those levels their standard of living is higher than their counterpart not just in Puerto Rico, but also in the USA.
Last time I read, Dominican sourced income is subject to tax. While foreign sourced income is generally not. They do this so foreigners invest in the D.R. and take a risk. However residents are subject to taxation on foreign investments and financial gain. In case of individuals who become residents, this foreign source income is taxed after the 3rd year.
D.R. has a bigger underground economy than Puerto Rico.
Quote:
Originally Posted by AntonioR
The main reason is that ever since the US took control of Puerto Rico in 1898, PR has essentially a free trade with American products. This wouldn’t happen, particularly on the things that have domestic production, before domestic companies are mature enough to compete with the usually much larger, more powerful and with access to more money US mainland based ones.
A perfect example would be hypermarkets such as Walmwrt, Target, etc. Almost all of them in PR are really US mainland based companies and they have done to PR something they can’t do in the US mainland, trat the sector as an oligopoly. This increases prices and, in fact, companies like Target have their most profitable stores in PR despite they are in just about all 50 states and all of them have a higher average incone and purchasing power parity than PR. I don’t know if this is still the case, but for many years these companies prevented Puerto Ricans in PR from buying from their websites, since the prices for many things are cheaper there than in the stores they have in PR. The prices in their websites correspond with what they can’t do in the US mainland. Then there are other things such as the Jones Act that further increases prices for things these stores sell in PR.
It's call credit and guarantee loans. That's why most of the products in Puerto Rico comes directly from the U.S. You take that out and Puerto Rico is screwed.
and how is that working out for Dominicans? They have a 65% lower purchasing than Puerto Rico and they have a bigger underground economy than P.R.
I will say rather well though most want things to happen faster. The DR has seen an increase of its middle class, consumption in general is also up, it has become the country that converges the most with other Latin American country and is only one of two or three in the hemisphere that is actually decreasing the gap between its standard of living and traditional ones. This last one is also seen with Puerto Rico since the gap of income has been decreasing for several years unlike how it was since the 1940’s when the gap was increasing due mostly to faster increasing wages in PR.
There are many ways of noticing this.
One of those ways is simply to look around. As hard as this would be to believe unless they have seen the country then and now, as recent as the 1990’s there are many aspects of the DR that look different. This is beyond the typical “change of the times” which affects all countries and territories. For example, a visit to San Juan in the 1980’s, say Condado to pick a place, and a visit to Santo Domingo kn that same time and then again now and largely San Juan looks the same. Many areas of Santo Domingo literally look like a completely different place.
Another example just to name another one is that as recent as the 1990’s something simple like buying an apple was always available and at a quite accessible price point. At the same time, in the DR apples were only on sale in certain times of the year and when it was tended to be very expensive. Not many people were able to buy one apple for themselves, rather one would be bought and one tiny slice would be spread around and that was all the apple you’re going to eat for that year. Today, availability of apples in the DR is yearround and people are able to afford more as eating a full apple by yourself isn’t unheard of.
There are many other differences. In the 1990’s in PR washer machines were the norm while in the DR washing clothes near a river and walking a long way from your house to a water source and then carry the water back to your house was much more normal. In PR all women gave birth in hospitals while in the DR a significant portion gave birth outside of them. Today, washer machines are the norm in the DR, traveling long distance to find water is practically unheard of, etc.
Change is happening mich more quickly in the DR and its the type of change that you can actually see it as time goes on.
Quote:
Originally Posted by SanJuanStar
What domestic Dominican products competes with the U.S.? Cars, electronics, software, hardware? Apart from domestic food and cheap service, there isn't much of a competition.
You should go into a Dominican stores and see it. For almost every American product there are Dominican ones, that wasn’t the case. From chips, coffee, cereal to deodorant, hair products, paint. The DR already has the second largest manufacturing sector in the Caribbean and most of what it produces is for domestic consumption. Of all the thing the DR produces, I would say 10%-11% is exported. The exception are the ones in zona franca industrial parks which export almost 100% of what it produces and most companies found there are foreign such as Timberland, now a Japanese electronic component producer will be installing in Santiago, etc.
Quote:
Originally Posted by SanJuanStar
Last time I read, Dominican sourced income is subject to tax. While foreign sourced income is generally not. They do this so foreigners invest in the D.R. and take a risk. However residents are subject to taxation on foreign investments and financial gain. In case of individuals who become residents, this foreign source income is taxed after the 3rd year.
Foreign source income isn’t taxed. On this front the DR is more like the UK (and most countries for that matter) while the USA is one of the few countries that not only taxes foreign source income, but it also tax Americans living outside of the USA even if they hardly or ever are in the USA.
Quote:
Originally Posted by SanJuanStar
D.R. has a bigger underground economy than Puerto Rico.
That’s irrelevant since while it captures the imagination of many people, in reality its impact is a lot less. For example, the entire Caribbean moves about $3 billion in illicit drugs. That’s a lot of money. Do you know how much money just in private household consumption is done every year? $3 billion is nowhere near the size of Santo Domingo’s economy alone.
Quote:
Originally Posted by SanJuanStar
It's call credit and guarantee loans. That's why most of the products in Puerto Rico comes directly from the U.S. You take that out and Puerto Rico is screwed.
Nothing stops Puerto Ricans to create their own products on many things. Plus, Puerto Rican products don’t have any legal limitations to reach stores in the USA mainland and sell them. What is seen is that PR largely consume things that are created by companies based in one of the 50 states and not the other way around.
Simply do down each sector. Most of PR’s aeronautics takes place at Luis Muñoz Marín Airport and while there are seen many airlines almost all of them are non-Puerto Rican (American from Texas, Delta from Georgia, Jetblue from NY, etc). The same with many other things. Puerto Ricans wash their clothes with detergent usually from US stateside brands such as Tide; the most popular stores in PR are places like Walmart, Target, Sam’s Club, etc which are all originally from stateside; etc. It isn’t just in PR, anyone would be hard-pressed to see Puerto Rican products on the stateside with the exception of some specialty places and only in specific localities where there is a large presence of Puerto Ricans.
This didn’t happen out of thin air. It was designed to be like this from the moment the US took control of PR. If brands from the stateside were to be eliminated in PR, it would immediately create a crisis since for much there isn’t a Puerto Rican brand to substitute. This doesn’t have to be this way, but right now it is. In the US mainland, if Puerto Rican products were to disappear and in most places people wouldn’t notice.
What was said in the last paragraph probably gives the importance of the Jones Act in PR.
Last edited by AntonioR; 02-25-2024 at 07:58 AM..
Please register to post and access all features of our very popular forum. It is free and quick. Over $68,000 in prizes has already been given out to active posters on our forum. Additional giveaways are planned.
Detailed information about all U.S. cities, counties, and zip codes on our site: City-data.com.
Please register to participate in our discussions with 2 million other members - it's free and quick! Some forums can only be seen by registered members. After you create your account, you'll be able to customize options and access all our 15,000 new posts/day with fewer ads.
What does those states have in common? They all have very liberal progressive governments that raises the cost of living with heavy taxation and regulations. If they could tax the air they breath, they would. They will get there. Working on it.
