Rum Battle in Caribbean Leaves Tax Hangover

on 16/10/10 at 10:06 pm

Industry

The new distillery built for Captain Morgan spiced rum in St. Croix in the Virgin Islands.

Rum and politics have made a fiery mix since America’s earliest days, when a young politician named George Washington won election to the House of Burgesses in colonial Virginia with the help of spiked punch at the polls.

There have been rum wars involving pirates and slave traders, and rumrunners who made a mockery of Prohibition.

Now the spirit once called Kill-Devil has set off a bitter dispute between two United States islands, Puerto Rico and the Virgin Islands, over a tax that the federal treasury collects on rum.

The fight began when the Virgin Islands persuaded the world’s largest distiller, which said it was leaving Puerto Rico, to move to St. Croix by offering a staggering $2.7 billion in tax incentives. The new distillery, for Captain Morgan spiced rum, will provide no more than 70 permanent jobs on the south shore of St. Croix — but it will entitle the Virgin Islands to collect billions in rum tax revenue from Washington.

{Full story via New York Times}

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