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UNITED STATES v. VAELLO MADERO 

Opinion of the Court 

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The Territory Clause of the Constitution states that Con-
gress may “make all needful Rules and Regulations respect-
ing the Territory . . . belonging to the United States.”  Art. 
IV, §3, cl. 2.  The text of the Clause affords Congress broad 
authority to legislate with respect to the U. S. Territories. 
  Exercising that authority, Congress sometimes legislates 
differently with respect to the Territories, including Puerto 
Rico,  than  it  does  with  respect  to  the  States.    That 
longstanding  congressional  practice  reflects  both  national 
and local considerations.  In tackling the many facets of ter-
ritorial governance, Congress must make numerous policy 
judgments that account not only for the needs of the United
States  as  a  whole  but  also  for  (among  other  things)  the 
unique histories, economic conditions, social circumstances, 
independent policy views, and relative autonomy of the in-
dividual Territories. 

Of relevance here, Congress must decide how to structure
federal taxes and benefits for residents of the Territories. 
In doing so, Congress has long maintained federal tax and 
benefits programs for residents of Puerto Rico and the other
Territories that differ in some respects from the federal tax
and benefits programs for residents of the 50 States.

On the tax side, for example, residents of Puerto Rico are
typically exempt from most federal income, gift, estate, and 
excise  taxes.  See  39  Stat.  954,  as  amended,  48  U. S. C. 
§734; see, e.g., 26 U. S. C. §§933, 2209, 4081–4084.  At the 
same time, residents of Puerto Rico generally pay Social Se-
curity,  Medicare,  and  unemployment  taxes.    26  U. S. C. 
§§3121(e), 3306(j). 

On the benefits side, residents of Puerto Rico are eligible 
for  Social  Security  and  Medicare.    §3121(e);  42  U. S. C. 
§§410(h)–(i), 1301(a)(1).  Residents of Puerto Rico are also 
eligible  for  federal  unemployment  benefits.   26  U. S. C. 
§3306(j);  see  also  House  Committee  on  Ways  and  Means,