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Sunday, February 05, 2017

WASTEBOOK: Whiskey Rebellion And Tea Party Served With A Twist

Georgia, Hawaii, Kansas, Michigan, Minnesota, New Hampshire, New Jersey, and Pennsylvania
U.S. Department of Agriculture and Department of Housing and Urban Development

Taxes on tea and whiskey brewed up two of the most famous rebellions in American history: The Boston Tea Party against the British tea tax levied on American colonists and the Whiskey Rebellion against the excise tax on distilled spirits imposed by the new U.S. federal government.

In an ironic twist, two hundred years later the federal government is now serving up subsidies for tea and whiskey makers.

The U.S. Department of Agriculture (USDA) Value-Added Producer Grants program awarded $390,000 to tea makers and $145,000 to whiskey producers this year. These include:

• $195,400 to Yaupon Tea Company in Georgia to expand the market for tea sales;
• $193,335 to help Mauna Kea Tea in Hawaii to “develop new green tea products and improve marketing”;
• $49,750 to Driftless Spirits in Minnesota “to market and brand organic, kosher grain to glass whiskey”;
• $58,056 to Canterbury Spirits in New Hampshire “to produce and market farmstead distilled spirits (including brandy, gin and whiskey) made from farm grown apples and rye”; and
• $38,000 to Marr Grange in New Jersey to “study the feasibility of establishing an onfarm distillery to process specialty grains, including rye, to create distilled craft whiskey.”

In addition, an ongoing study examining “flavor development in distilled spirits” at Michigan State University is being funded by the USDA National Institute of Food and Agriculture. The project summary points out the “economic potential for artisan distilling is quite high,” specifically noting the product provides “substantial public source of funds through both State and Federal excise taxes and mark-ups.” A study published as a result of this USDA-funded research examines how “to reduce the operating and investment costs of the production of high proof spirits.”

One certain way is to stop charging these projects to the tab of taxpayers.

USDA is not the only federal agency in the whiskey business.

A $100,000 “job creation” Community Development Block Grant (CDBG) from the Department of Housing and Urban Development (HUD) is “financing” the distilling equipment for a new distillery in Norristown, Pennsylvania. Five Saints Distilling and International Spirits LLC, a “grain to glass” distillery in which all of the distilling process is performed on site, opened this summer. Five Saints serves white whiskey, savory gin, vodka, and a blood orange liqueur with plans to add rum, rye whiskey and bourbon to the menu.

A $190,650 HUD grant “awarded under the commercial rehabilitation category of CDBG funding” helped transform the former city hall of Dodge City, Kansas, into a distillery. Boot Hill Distillery, opened the summer of 2016, produces white whiskey as well as vodka and gin with plans to eventually sell bourbon.

This reverse tea party/whiskey rebellion is unnecessary since there is growing consumer demand for both beverages. Sales of American whiskeys is “booming in the U.S. and abroad,” according to the Distilled Spirits Council, which marked “the sixth straight year of increasing market share” in 2015.  Tea is the most popular beverage in the world after water. The wholesale value of tea sold in the U.S. exceeds $10 billion a year, according to the Tea Association of the USA, with the Beverage Marketing Corporation projecting continued market growth for tea over the next five years.

Just as Americans protested taxes on tea and whiskey more than 200 years ago, subsiding the beverages today is still not the taxpayers’ cup of tea.



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