Caribbean Rum Wars: Brewing Tax Battle Stirs Frustration With U.S.
This is from the same paper on the friction between Puerto Rico and USVI over the rum subsidies:
Puerto Rico Rep. Calls Rum Rivalry With USVI ‘Race to the Bottom’The complicated debacle has put Puerto Rico, a U.S. commonwealth since 1952, in the ironic position of having to urge Congress to limit the amount of rum excise-tax rebates U.S. territories such as itself may earmark toward luring giant rum distilleries to their jurisdictions. The rebates are a financial windfall for Puerto Rico, bringing in more than $449 million in fiscal 2011. Pierluisi believes the rebates — which subsidize rum production — distort fair competition and are needlessly excessive. He also says too much of this money gets directed back to rum distillers instead of being used for economic development.
Interestingly, there may be a rum ally in congress, Yvette Clarke from New York (taken from the first article):
Finally, here is a picture from the first article:"The Caricom nations have a very valid concern, and I certainly want to use my office to get to the bottom of the thinking of the USTR," the congresswoman from Brooklyn told the New York Carib News. "The competition Caribbean rum producers would face because of the subsidies would not make their rum industry sustainable, and at some point we would face a major collapse of the bulk rum industry in the Caribbean if something isn't done."
