The Billion Dollar War Behind U.S. Rum (Planet Money)

When you buy a bottle of rum in the United States, by law nearly
all the federal taxes on that rum must be sent to Puerto Rico and
the U.S. Virgin Islands. It's an unusual system that Congress
designed decades ago to help fund these two U.S. territories. In
2021 alone, these rum tax payments added up to more than $700
million. Puerto Rico and the Virgin Islands split the money
according to how much rum each territory produces. And the
territories produce a lot of it — especially Puerto Rico, which
single handedly supplies the majority of the rum that Americans
drink. But in 2008, the U.S. Virgin Islands pulled off a coup. It
convinced one of the largest rum brands in the world, Captain
Morgan, to abandon Puerto Rico and to shift its operations to the
tiny island of St. Croix. This was the beginning of the Rum Wars.
Listen in to the story of how this war turned the two territories
into bitter rivals—and put hundreds of millions of U.S. taxpayer
money in the pockets of big liquor companies. (Guest episode) Learn
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