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US TERRITORIES

AND THE PLATFORM

How the Platform Treats Residents of Puerto Rico, Guam, USVI (United States Virgin Islands), American Samoa, and the Northern Mariana Islands

How does the platform's federal income tax architecture apply to territories with mirror codes or separate tax systems?

How do universal healthcare and other commitments work for territorial residents?

How does the platform handle the asymmetric federal program treatment territories currently receive?

An Analytical Framing Document

Jason Robertson

v1.0 · Created May 5, 2026 for v2.18

Ohio · 2026

The Question This Document Addresses

Approximately 3.5 to 3.7 million people live in the five inhabited US territories: Puerto Rico (approximately 3.2 million), Guam (approximately 170,000), the US Virgin Islands (approximately 85,000), the Northern Mariana Islands (approximately 50,000), and American Samoa (approximately 45,000). Residents of Puerto Rico, Guam, USVI, and the Northern Mariana Islands are US citizens by birth. American Samoans are US nationals (a distinctive legal status that grants most rights of citizenship except the right to vote in federal elections from the territory and the right to certain federal positions). Territorial residents collectively represent about 1 percent of the total US population — a small fraction in absolute terms but a substantial population that the platform must address explicitly.

Federal program treatment in territories differs from treatment in states in ways that have been described as systematic disadvantage. Federal income tax operates differently in each territory: Puerto Rico residents do not pay federal income tax on Puerto Rico-source income but do pay federal payroll taxes (Federal Insurance Contributions Act (FICA), Medicare); Guam, USVI, and the Northern Mariana Islands operate 'mirror code' tax systems where federal tax law applies but revenues stay in the territory; American Samoa has its own tax code separate from federal. Federal programs including Medicare, Medicaid, the Affordable Care Act marketplaces, SNAP (Supplemental Nutrition Assistance Program), and Supplemental Security Income operate under different formulas in territories than in states, with most differences disadvantaging territorial residents. Territories have non-voting Congressional delegates and no electoral votes for President. The constitutional framework underlying these distinctions — the Insular Cases of the early twentieth century — has been substantially criticized as bad law but remains operative.

This document maps the platform's commitments against territorial federal program treatment, identifies the design choices the platform must make about territorial scope, and analyzes the failure modes that arise from the existing asymmetric federal architecture. The analysis is more framework-level than the prior phased-expansion documents because territorial federal program treatment is genuinely complex and changes through legislation periodically. Specific tax mechanics, specific Medicaid formula details, and specific recent legislative changes warrant expert review by territorial federal program specialists before implementation.

Why Territories Are Treated Differently

The constitutional foundation for distinguishing territories from states is rooted in a series of Supreme Court decisions from 1901-1905 known as the Insular Cases. These cases held that the Constitution does not automatically apply in full to territories acquired by the United States and that Congress has substantial authority to determine which constitutional protections apply in territories. The Insular Cases distinguished between 'incorporated' territories (intended for eventual statehood, where the Constitution applies fully) and 'unincorporated' territories (not intended for statehood, where Congress has greater discretion). All current US territories are unincorporated.

The Insular Cases have been criticized substantially by legal scholars, civil rights advocates, and Supreme Court justices in concurring and dissenting opinions. The cases were decided in a context that included explicit racial framing about whether territorial inhabitants were capable of self-governance. The reasoning has been described as 'a relic of an unenlightened era' (Justice Sotomayor, concurring in United States v. Vaello Madero, 2022). However, the cases remain operative. Federal program differential treatment of territories continues to be constitutionally permitted under the Insular Cases framework, even when individual cases (like Vaello Madero, which addressed SSI eligibility for Puerto Rico residents) reach the Supreme Court.

The platform inherits this constitutional framework. Federal program design choices that distinguish territories from states are constitutionally permitted; the platform's design must work within this framework while making deliberate choices about how favorable or unfavorable to territories specific platform commitments should be.

Federal Tax Architecture in Each Territory

Puerto Rico

Puerto Rico residents pay federal payroll taxes (FICA at 6.2 percent for Social Security, Medicare at 1.45 percent for employees, with employer matches) on earnings from work in Puerto Rico. They do not pay federal income tax on Puerto Rico-source income (income earned in Puerto Rico from Puerto Rico employers). They do pay federal income tax on US-source income (income earned outside Puerto Rico, dividends from US corporations, etc.). Puerto Rico has its own income tax system administered by the Puerto Rico Department of Hacienda.

Under the platform, the federal income tax architecture changes with the wage floor exemption replacing the standard deduction for federal income tax purposes. For Puerto Rico residents, this affects only their US-source income, since their Puerto Rico-source income is not subject to federal income tax. The wage floor exemption applied to US-source income generally helps Puerto Rico residents who have such income (dividends from US companies, occasional mainland work). For most Puerto Rico residents, the platform's federal tax architecture has limited direct effect because their primary income is not federally taxed.

Puerto Rico's payroll tax exposure to the platform is more substantial. The universal healthcare contribution (4% employer, 2% employee) presumably applies to Puerto Rico-source wages just as FICA does. Puerto Rico workers paying this contribution should presumably receive universal healthcare coverage in return. Whether the universal healthcare delivery infrastructure extends to Puerto Rico (with Puerto Rico's own healthcare provider network and the existing Mi Salud Medicaid-funded program) requires explicit specification. The platform's silence on this point is a substantial gap.

The Community Contribution Plan replacing FICA in mature steady state would similarly apply to Puerto Rico workers as FICA currently does. Puerto Rico workers would presumably continue to receive Social Security retirement benefits through CCP (Community Contribution Plan)-equivalent revenue. The transition should be substantially seamless for Puerto Rico residents.

Guam, USVI, and the Northern Mariana Islands

These three territories operate 'mirror code' tax systems. The Internal Revenue Code is applied as if the territory were the United States, with the territory substituted for the United States; tax revenues stay with the territorial government rather than flowing to the federal Treasury. Residents of these territories pay federal income tax (in form) under federal rates and rules, but the tax is paid to and retained by the territorial government.

Under the platform, the federal income tax architecture (wage floor exemption replacing standard deduction) presumably applies to mirror-code territories the same way it applies to states, since the mirror code adopts federal rules by reference. Whether the territory's tax revenue is reduced (if the wage floor exemption is more generous than the standard deduction for typical territorial filers) or increased (if particular territorial demographics make the standard deduction more favorable) depends on specific occupational and income patterns in each territory. This is an empirical question requiring territorial economic data.

Federal payroll taxes apply in mirror-code territories the same as in states. The universal healthcare contribution would apply to mirror-code territorial wages. The Community Contribution Plan transition would apply analogously. The platform's payroll-funded commitments produce relatively uniform treatment across mirror-code territories and states, with similar workforce-funded benefit access.

American Samoa

American Samoa operates an entirely separate tax code rather than a mirror code. Federal income tax does not apply to American Samoa residents on income from American Samoa sources; American Samoa has its own income tax system. Federal payroll taxes apply to American Samoa workers, similar to other territories.

The platform's federal income tax architecture has limited direct effect on most American Samoa residents because their primary income is not federally taxed. Their payroll tax contributions to the platform's universal healthcare and other payroll-funded commitments would presumably function similarly to other territories. American Samoa is the smallest of the inhabited territories and has the most distinctive legal framework (its residents are US nationals rather than US citizens, and several federal programs treat American Samoa differently from other territories).

Federal Healthcare Programs in Territories

Medicare operates in all five territories with substantially the same benefit structure as in states. Medicare beneficiaries in territories receive the same Part A, Part B, Part C (Medicare Advantage), and Part D coverage as state residents. Medicare reimbursement rates to providers vary across territories due to area-wage-index adjustments and other formula factors, which has been a chronic concern in territories where reimbursement rates affect provider availability and quality.

Under the platform, universal healthcare absorbs Medicare's working-age and Medicare-age coverage. For territorial residents, this should produce similar effects as for state residents: comprehensive medical coverage with absorbed Medicare functions. The specific provider network in each territory continues; the federal funding architecture changes; the resident experience should be consistent across territories and states for Medicare-equivalent care.

Medicaid in territories operates very differently from Medicaid in states. Territorial Medicaid programs receive federal funding through capped block grants rather than through the open-ended matching arrangement available to states. Section 1108 of the Social Security Act establishes territorial Medicaid funding caps that have historically been substantially below the federal funding states receive on a per-capita basis. The caps have been adjusted periodically through legislation (most recently in significant ways through legislation in 2019-2020 and subsequent years) but the structural funding gap has persisted.

The structural Medicaid funding gap has been the largest single federal program disparity territorial residents face. In any given year, federal Medicaid funding per capita in Puerto Rico has typically been substantially below per capita federal Medicaid funding in states. Puerto Rico's Mi Salud program (Puerto Rico's Medicaid-funded health program covering substantial fractions of the population) operates under chronic funding pressure tied to the federal cap. The funding cap has been described as 'colonial discrimination' by Puerto Rican officials and has been the subject of repeated legislative reform efforts.

Under the platform, universal healthcare's relationship to territorial Medicaid is not currently specified. Two approaches are plausible. Approach A: Universal healthcare provides federal coverage to territorial residents through the platform's general funding architecture, eliminating the need for territorial Medicaid for most working-age residents (similar to how universal healthcare absorbs state Medicaid working-age coverage in cooperating states). The territorial Medicaid funding cap becomes less relevant because the population needing Medicaid coverage shrinks substantially. Approach B: Universal healthcare coexists with territorial Medicaid, with territorial Medicaid continuing to fund long-term care, HCBS (Home and Community-Based Services), and other coverage that universal healthcare does not address. The funding cap continues to constrain territorial Medicaid; the platform does not directly address this.

Approach A is more consistent with the platform's universal architecture and more favorable to territorial residents. Approach B is administratively simpler in the sense that it preserves existing territorial Medicaid arrangements but perpetuates the funding gap. The platform's design choice has substantial consequences for territorial residents.

ACA marketplaces operate in some territories but not all, with substantial variation. The Affordable Care Act's marketplace structure was extended to states but not consistently to territories; some territorial residents have access to ACA-equivalent marketplaces and some do not. The platform's universal healthcare absorbs the ACA marketplace function for working-age residents in any case; territorial residents who are currently in ACA-equivalent coverage transition to universal coverage on the same terms as state residents. Territorial residents currently without ACA-equivalent coverage gain coverage through the universal architecture.

Other Federal Programs in Territories

Several other federal programs operate differently in territories than in states. SNAP (food assistance) operates in some territories under the standard SNAP framework and in others (Puerto Rico, American Samoa, Northern Mariana Islands) under block grant arrangements that have historically been less generous than the standard SNAP program. SSI (Supplemental Security Income) does not operate in Puerto Rico, the Northern Mariana Islands, or American Samoa; the territories instead operate Aid to the Aged, Blind, and Disabled programs under different rules. The exclusion of Puerto Rico residents from SSI was the subject of United States v. Vaello Madero (2022), which the Supreme Court resolved in favor of the federal government's authority to exclude Puerto Rico from SSI under the Insular Cases framework, despite Justice Sotomayor's pointed criticism in concurrence.

These program differences continue under the platform unless explicitly addressed. The platform does not currently modify SNAP, SSI, or other federal program territorial treatment. Whether the platform's broader social investment frame should include extending these programs to territories on equal terms with states is a real policy question the platform's current scope does not address.

Federal disaster response is particularly relevant for territories given Puerto Rico's experience with Hurricane Maria (2017) and subsequent disasters, the Northern Mariana Islands' experience with Typhoon Yutu (2018), and other events. Federal disaster response has been criticized as substantially inadequate in territorial contexts, with Puerto Rico's Hurricane Maria response in particular being analyzed as a failure of federal commitment. The platform does not directly address federal disaster response architecture; this remains a substantial unaddressed concern for territorial residents.

Sovereign Fund and Federal Fiscal Effects

The Sovereign Fund's growth and disbursement architecture operates at the federal level. Territorial residents' contributions to the Sovereign Fund's revenue base depend on their federal payroll tax exposure (which applies to all five territories) and federal income tax exposure (which varies substantially as described above). For most territorial residents, payroll tax contributions are substantial while federal income tax contributions are limited.

The Sovereign Fund's disbursements presumably flow through the platform's commitments — universal healthcare, universal childcare, Universal Mental Health, and other commitments funded in part through Sovereign Fund disbursement. Whether territorial residents receive these benefits on equal terms with state residents depends on the platform's design choices for each commitment. If the platform's universal commitments extend equally to territories, territorial residents share in the Sovereign Fund's benefits despite their differential federal tax exposure. If the platform's commitments do not fully extend to territories, territorial residents' contribution to the Sovereign Fund (through payroll taxes) is not matched by full benefit access — the pay-but-don't-receive failure mode that prior documents have flagged in other contexts.

The platform should commit explicitly to equal territorial extension of its universal commitments. This commitment does not eliminate all territorial disparities (federal tax structure differences continue, the constitutional framework continues, federal disaster response continues to require separate attention), but it does eliminate the platform-specific risk of extending the existing pattern of territorial disadvantage into a new federal architecture.

The Constitutional Framework Question

A platform designed to address systematic American disadvantage might reasonably be expected to address the systematic disadvantage that territorial residents experience under the Insular Cases framework. The platform does not currently take a position on the Insular Cases or on the broader question of territorial constitutional status. This silence is consistent with the platform's broader scope (it does not address constitutional reform, federalism reform, or governance reform; it focuses on economic and social policy). But the silence is also a real choice given that the platform's universal commitments would deliver more value to territorial residents if the underlying framework were less restrictive.

Three positions on the constitutional framework are plausible. Position A: The platform takes no position on territorial constitutional status. The Insular Cases continue; the platform's commitments work within that framework as best they can. Position B: The platform supports congressional action to reduce or eliminate the federal program differential treatment of territories without directly addressing constitutional status. This is the path of least constitutional resistance: federal programs can extend to territories on equal terms through legislation, even within the Insular Cases framework. Position C: The platform supports constitutional or legal reform of territorial status. This is the most ambitious position and involves territorial status questions (statehood, independence, free association, current status reform) that have substantial political complexity beyond the platform's other commitments.

Position A is the path of least resistance and is consistent with the platform's current scope. Position B is consistent with the platform's broader social investment frame and would substantially benefit territorial residents through specific federal program extensions. Position C is beyond the platform's current scope but would be the most substantive engagement with territorial inequity. The choice depends on the platform's strategic priorities and the political environment at deployment time.

Failure Modes

The Asymmetric Extension Failure Mode

If the platform's universal commitments do not extend to territories on equal terms, territorial residents pay platform contributions (through payroll taxes) without receiving full platform benefits. This is the same pay-but-don't-receive failure mode that prior documents have flagged in other contexts (unauthorized workers in the v2.15 non-citizens analysis; Section 218 non-covered workers in the v2.16 public-sector analysis). For territorial residents, the asymmetric extension failure mode would extend the existing pattern of territorial disadvantage into a new federal architecture. The platform should commit explicitly against this outcome.

The Implementation Capacity Failure Mode

Even if the platform commits to equal territorial extension, implementation requires functional federal infrastructure in each territory. Universal healthcare delivery, universal childcare delivery, Civic Infrastructure deployment, and other commitments require operational capacity. Federal agencies' territorial operational capacity varies substantially. Some agencies have well-established territorial operations (Social Security, Medicare); others have limited territorial presence. Building adequate operational capacity is a multi-year program for any commitments that require new federal infrastructure in territories.

The Communications Asymmetry Failure Mode

The platform's communications materials are produced primarily for state-resident audiences. Territorial residents may not see themselves in materials designed around state-based examples and assumptions. Spanish-language materials are particularly important for Puerto Rico's substantial Spanish-speaking population; specific territorial-context materials are needed for each territory. The platform's communication infrastructure has not addressed this; territorial communications are an unaddressed area.

The Political Voice Failure Mode

Territorial residents have limited political voice in federal policy. Non-voting Congressional delegates can introduce legislation and participate in committee work but cannot vote on the floor. Territories have no electoral votes. Federal policy affecting territories is therefore made primarily by representatives of state populations who may or may not consider territorial perspectives. The platform's enabling legislation will be debated in Congress where territorial representation is structurally limited; territorial residents' specific concerns may not be addressed adequately even if territorial advocates argue for them. This is a political process question that the platform cannot solve directly but should acknowledge.

Open Questions

Should the platform commit explicitly to equal territorial extension of all universal commitments? The principle is defensible but the implementation specifics require detailed design that the current platform does not provide.

How does universal healthcare delivery work in each territory? Provider network development, coordination with existing territorial healthcare programs (Mi Salud in Puerto Rico, similar programs in other territories), and federal-territorial cooperation analogous to federal-state cooperation are all required. Specific design choices for each territory have not been worked out.

How does the platform interact with Section 1108 territorial Medicaid funding caps? If universal healthcare absorbs working-age Medicaid coverage in territories the same way it does in states, the funding cap may become less binding. But long-term care, HCBS, and other coverage continuing under territorial Medicaid still face the cap.

Does the platform support congressional action to extend SSI, equalize SNAP, or eliminate other federal program territorial differentials? Position B in this document outlines this path; the platform's current commitments do not include such extension.

How should the platform's communications infrastructure address territorial audiences? Spanish-language materials for Puerto Rico, Chamorro-language considerations for Guam, and territory-specific contexts are all needed. The platform's existing communications materials do not address these.

How does the platform interact with American Samoa's distinctive legal status (US nationals rather than US citizens)? American Samoans have most rights of citizenship but specific differences may produce edge cases that the platform's commitments need to address.

How does federal disaster response interact with the platform's broader Civic Infrastructure investment? Territorial vulnerability to natural disasters (hurricanes, typhoons, earthquakes) affects platform delivery in ways the federal-state cooperation analysis (v2.14) framework does not directly address.

Should the platform take a position on the Insular Cases or broader territorial status questions? The platform's current scope does not engage these questions; engaging them would substantially expand platform scope.

How do territorial residents who move to states (very common for Puerto Rico residents in particular) experience platform transitions? Federal program eligibility transitions when residents move between territories and states have specific complexity.

Closing

US territories are home to approximately 3.5 to 3.7 million US citizens (and US nationals in American Samoa) whose federal program treatment differs systematically from state residents. The platform inherits this complex constitutional and statutory framework. The platform's design choices for territorial scope have substantial consequences for territorial residents — both in absolute terms (the platform either delivers benefits to territories on equal terms or does not) and in symbolic terms (the platform either continues the pattern of territorial differential treatment or makes a commitment against doing so).

The most defensible commitment is explicit equal extension of all platform universal commitments to territorial residents. Universal healthcare delivery, universal childcare, Universal Mental Health access, the wage floor exemption, the Refundable Transition Bridge Credit, the Founding Stake, and other commitments should reach territorial residents on the same terms they reach state residents. Implementation requires building or extending federal operational capacity in each territory, which is a multi-year program that should be on the platform's deployment timeline rather than treated as a downstream consideration.

Beyond the platform's universal commitments, the broader question of territorial federal program treatment (SSI, SNAP block grants, Medicaid funding caps, ACA marketplace structure) is not directly addressed by the current platform but is a real area where future platform development could substantively benefit territorial residents. The political and constitutional environment for territorial federal program reform is more favorable than for territorial constitutional status reform; congressional action to equalize federal program treatment is achievable within the existing constitutional framework even if the framework itself remains contested.

Communication infrastructure for territorial audiences is currently underdeveloped. Spanish-language materials, territory-specific contexts, and engagement with territorial advocacy organizations are all needed for the platform to be evaluated fairly by territorial residents. This is implementation work that has not been done. The platform's deployment in territories depends on this work being completed before territorial residents are asked to evaluate the platform.