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The billion dollar war behind U.S. rum

Planet Money

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The Domino Effect of Rum Subsidies

Increasing subsidies for rum companies in the Virgin Islands led to a ripple effect where subsidies spread from one company to another, causing financial strain on the government. As the competition intensified, additional subsidies had to be provided to struggling companies, making large rum subsidies the new norm. Despite not meeting all expectations, the Virgin Islands benefitted financially. Ultimately, the rum companies emerged as the biggest winners, with federal taxes from rum sales in the US being divided between the Virgin Islands and Puerto Rico.

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