Fiscal Cliff Bill’s Hidden Subsidy For Caribbean Rum

By ⋅ January 3, 2013 ⋅ Post a comment
Rum fills up the shelves in an American liquor store (Photo: WIKI)

Rum fills up the shelves in an American liquor store (Photo: WIKI)

Our Geo Quiz is inspired by that fiscal cliff legislation you’ve heard so much about. At over 150 pages, the bill passed by Congress to avoid the fiscal cliff is not a quick read. But one section stands out:

It’s about rum.

The bill extends a tax on all rum imported into the United States. But most tax revenue collected on rums from Puerto Rico and the Virgin Islands doesn’t go to pay the deficit. It subsidizes rum production in those United States territories.

Most other Caribbean region rum producers think that’s unfair.

Our question for you is:

Where in the Caribbean region would you find the “oldest continuously producing rum distillery”?

Name the country where rum’s been made in wooden stills along the banks of the Demerara River since the 17th century.

For almost a century, Uncle Sam has collected excise taxes on Caribbean rum.

No surprise there.

But did you know that almost all of the tax placed on rum from Puerto Rico and the US Virgin Islands specifically goes right back to those territories, which then reinvest the money in rum promotion and production?

That has rum exporting nations elsewhere in the Caribbean fuming. Edward Hamilton writes and blogs about rum.

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Discussion

One comment for “Fiscal Cliff Bill’s Hidden Subsidy For Caribbean Rum”

  • http://www.facebook.com/jimbos.rumproject Jimbos Rumproject

    It’s really going way beyond feeling that it’s “unfair”.   This massive subsidy actually threatens the existence of Caribbean distillers, especially from the Bahamas, Jamaica, Barbados, Guyana and the Dominican Republic.    According to CARICOM – their organization – this subsidy threatens their actual existence.

    It is a travesty that strikes at the heart and soul of rum and this dirty deal must be undone.  If you really care about continuing to see fine Caribbean rums at fair prices, please sign this petition…

    http://www.gopetition.com/petitions/stop-massive-u-s-rum-subsidies-to-the-usvi-and-puerto.html