by Mark Silva
Among the sweeteners that helped the $700-billion bailout of the financial industry go down in Washington this week was a $192-million break for rum..
But the distillers say we haven't got the break for Puerto Rican and Virgin Island rum quite right.
"Rum companies did not receive a tax break in the financial package,'' Lisa Hawkins, vice president for public affairs of the Distilled Spirits Council, advises us today.
"This has been widely misreported,'' she notes.
"The tax is paid by the distillers to the federal government,'' Hawkins explains. "The federal government returns the dollars to the ISLAND governments for infrastructure projects. It is long standing practice.''
"When taxwriters raised the FET for everyone in 1991 to $13.50 from $10.50 they failed to include this arrangement for the Iisland goverments,'' Hawkins explains. "Thus it became a technical correction that gets fixed in the tax extenders package every year since then.
"Each year I get a few questions about this because of the same confusion,'' she notes. "It is IN FACT a transfer of the TAXES PAID by the distillers, from the feds to the Island governments.''
It goes well, of course, with a $700-billion bailout.
Make mine a pina colada.
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Comments
Where are all those guys that wanted to simplify the tax code?
Posted by: Kenneth Janowski | October 4, 2008 12:15 PM
Mai Tais or Cuba Libres is what I'll be drinking through this mess.
Posted by: lochnessmonster | October 4, 2008 2:23 PM
HERE'S ONE TO LOOK UP>someone told me that Obama was planning to add on LOWERING the subprime borrowers PRINCIPLE on their loans. This is quite different from just lowering their interest rates because the PRINCIPLE is the BANKS ASSET and when the bank does like before and bundles it all up for collateral in business dealings aren't we put right back in the same place where the paper isn't worth whats printed on it and therefore a COLLAPSE AGAIN...... Anyone know if he actually ended up doing that???
Posted by: GOOD GOSH>WHAT IS IN THAT BAILOUT | October 4, 2008 4:36 PM
BIDEN actually told Americans that Obama not only supports adjusting the interest but ALSO ADJUSTING THE PRINCIPLE on bad loans in the Palin vs Biden debate. Here is his exact quote>
Number two, with regard to bankruptcy now, Gwen, what we should be doing now -- and Barack Obama and I support it -- we should be allowing bankruptcy courts to be able to re-adjust not just the interest rate you're paying on your mortgage to be able to stay in your home, but be able to adjust the principal that you owe, the principal that you owe.
That would keep people in their homes, actually help banks by keeping it from going under. But John McCain, as I understand it -- I'm not sure of this, but I believe John McCain and the governor don't support that.
There are ways to help people now. And there -- ways that we're offering are not being supported by -- by the Bush administration nor do I believe by John McCain and Gov. Palin.
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THAT'S RIGHT BIDEN>the American people are outraged by the bailout BUT to add CUTTING THE PRINCIPLE which is the PRICE OF THE LOAN THEY GOT IS FLAT OUT STEALING MONEY FROM THE BANKS ASSETS THEY ARE OWED.
It would be like a judge telling your employer that he only has to pay you a portion of what you are owed and then you have to be happy with it and make do with it. YOU WOULD GO BROKE and quick ! ! !
Posted by: OBAMA not ready to lead>doesn't understand economics 101 | October 4, 2008 8:31 PM
"The tax is paid by the distillers to the federal government,'' Hawkins explains. "The federal government returns the dollars to the ISLAND governments for infrastructure projects. It is long standing practice.''
So the money runs from the distillers to the feds and then back to the islands? Of course the feds probably skim a little off the top for administrative fees. So for every dollar that goes to DC, some smaller amount goes back to the islands.
This is no different than the fed gov't and education funding. Money comes from taxpayers from all 50 states to DC, the wisdom of DC bureaucrats will then appropriately redistribute the cash, after a "small administrative charge" back to the local gov'ts. Why nothave the money just stay in the individual states?
People wonder why DC is crawling with lobbysts? Why Congressman are unethical? It is the same reason Jesse James robbed banks - It's where the money is at.
Posted by: Terry | October 5, 2008 8:58 AM