Puerto Rico’s ‘death spiral’ can be traced back to one mistake

Puerto Rico is $72 billion in debt, and it will take a painful process to bring the island’s finances back from the brink.

It’s a massive debt load for such a small territory, and the problem can really be traced to one issue — bad tax policy.

After Puerto Rico let one tax break for manufacturers expire almost a decade ago, manufacturers started shutting down operations on the island. That caused a spike in unemployment.

On top of that, business-friendly tax policies for some of the companies that remained allowed multinational giants to pay tax rates of little more than 1%…..

Read more: http://www.businessinsider.com/how-puerto-rico-got-in-over-its-head-2015-8#ixzz3iAeI8mjH

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