Monday, September 7, 2009
As most of you know, Captain Morgan, a rum manufactured by Diageo, has become very popular in the past few years. While I'm not a drinker, I've been told it's very good. In fact, on New Year's, my husband thought it was so good we ended up stopping on the way home to allow him to barf. He's vowed never to sail with the Captain again.
Diageo is a London-based company with a rum distillery in Puerto Rico. They are also the makers of Johnnie Walker Black Label. Diageo is poised to move their Captain Morgan operation from Puerto Rico to St. Croix in the U.S. Virgin Islands. When they do, they will be building a new state-of-the-art distillery and providing 40 to 70 new jobs to St. Croix while hundreds in Puerto Rico will lose theirs. What does all of this have to do with you and I? Diageo will get $2.7 billion in tax credits and benefits from the U.S. government. In short, we will be paying Diageo money to fund their operations in an unincorporated U.S. territory. All this will happen during the worst economic climate since the Carter years.
"TurboTax" Geithner has said that he doesn't have the authority to investigate or block the deal because the subsidies will come from a special tax on every bottle of rum sold in the U.S. The total expected money to be collected is $500 million. The Ways and Means committee chairman of the House refuses to intervene as well. That would be Charlie Rangel. Right now, he's busy trying to get his pee-pee out of the wringer on tax corruption allegations.
Why does the government feel the need to give tax breaks to a corporation that sees millions (if not billions) of dollars in profits every year? Can't Diageo fund their own operations? Now if this had been a Republican administration giving tax credits and funding to a very well-established company with major profits, the cries of "corporate welfare" would still be echoing somewhere around the South Pole.
The silence from this administration demonstrates that they not only approve of this deal, but they're probably going to make the next First Family vacation one to St. Croix.