A new report released by Right to Democracy, a nonprofit advocating for equity and self-determination in the islands and other United States territories, argues that overturning the Insular Cases would not automatically result in new or increased federal taxation for residents.
The report, Overruling the Insular Cases: What About Federal Taxes?, was co-authored by Right to Democracy Co-Director Neil Weare and tax law experts Sumaya H. Bouadi and Alex Golubitsky. It seeks to dispel a widely held belief that the Insular Cases—the early 20th-century Supreme Court decisions that created a framework for the separate and unequal treatment of the territories—are the reason why most residents in the islands do not pay federal income taxes.
Each year, residents in the territories collectively pay more than $5 billion in federal taxes, but most are exempt from paying federal income tax. According to the authors of the report, this exemption is not tied to the Insular Cases but rather to broader congressional authority over taxation.
“This time of year, when people have taxes on their minds, is a good time to dispel the persistent myth that overruling the racist Insular Cases would trigger new taxes or disrupt the current tax framework,” Weare said. “People do not have to choose between challenging the Insular Cases and protecting their wallet.”
The report highlights longstanding interpretations of the US Constitution, particularly the Uniformity Clause, that give Congress discretion to vary tax policy across different jurisdictions—including states. Bouadi, one of the report’s co-authors, pointed to Supreme Court precedent allowing geographically based tax distinctions. “The US Supreme Court has made clear for decades that the Uniformity Clause of the Constitution does not mandate the kind of strict uniformity many assume it does,” she said.
Golubitsky, who focuses on tax law in the territories, added that the Court reaffirmed this principle as recently as 2022, noting that Congress’s authority over federal taxes and benefits in the territories does not depend on the Insular Cases.
Right to Democracy, which launched a campaign in 2024 calling for the Insular Cases to be overturned, has positioned the decisions as rooted in outdated and discriminatory reasoning. The Department of Justice, responding to advocacy from the group, stated in 2024 that “the racist language and logic of the Insular Cases deserve no place in our law.” Justices Neil Gorsuch and Sonia Sotomayor have also criticized the rulings, with Gorsuch describing them as having “no foundation in the Constitution” and Sotomayor calling their premise “odious and wrong.”
The report is the first in a planned series from Right to Democracy examining common questions about the legal and practical implications of overturning the Insular Cases. The organization is inviting public feedback and questions as the series develops.
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