Posted on 03/18/2010 6:11:42 AM PDT by greatdefender
Captain Morgan is packing his bags and moving to the U.S. Virgin Islands — a relocation that is making waves from Puerto Rico to Washington and riling some Central Florida politicians.
Diageo, a British liquor conglomerate that owns the popular spiced-rum brand, was lured to the Virgin Islands by up to $2.7 billion in rebates over 30 years on the excise taxes that the company pays to import the rum onto the mainland. The company also will move into a new $165 million distillery and get a 90 percent income-tax break.
The deal dismayed another U.S. territory, Puerto Rico, which has made Captain Morgan rum for more than two decades.
But what has many crying foul is that the money to finance the Diageo deal comes from the rum cover-over program, developed during colonial times to assist U.S. possessions with building infrastructure and fostering economic growth.
Bad public policy or smart deal?
Puerto Rico has been making rum commercially since the 19th century. With more than 200 brands, the island produces more rum than any country in the world and makes about 80 percent of all rum imported to the U.S. The rum-rebate program has meant about $400 million a year for the island's schools, roads and many other public uses. The island also uses the revenue to guarantee bonds.
But that could change drastically in 2012, when Diageo starts making Captain Morgan in St. Croix and $80 million in annual rebates shifts from Puerto Rico to its Caribbean neighbor. The Virgin Islands commits to giving about 40 percent of that to Diageo in subsidies and incentives.
(Excerpt) Read more at articles.orlandosentinel.com ...
Love St. Croix! If I had the bucks I would buy a condo down there and spend my final days. No hassles with Customs, 3.5 hour flight to most major cities targeted by our enemies. Not to mention Cruzan Double Diamond rum that I am so fond. Now the Cap’n coming to town! oh and the biggest refinery in the Caribbean. Here is the place we stayed.
http://www.qth.com/k7bv/Virgin%20Islands/
This was friends trip but has good pix.
Tax breaks breed buisness.
Wow!
Yeah, who would have thought, huh?
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