Bloomberg News reports today on some of the more egregious unintended consequences of the Economic Stabilization legislation (Bank Bailout) that was passed last October. In particular, one of the tax breaks extended under the legislation will result in a $2.7 billion benefit to London-based Diageo Plc, which benefits from tax breaks received by rum distilleries it owns in the Caribbean, according to the report.
Soon after the bill’s passage in October 2008 TCS highlighted the extension of numerous tax sweeteners, including for rum companies, producers of wooden arrow, and racetrack owners. TCS’s analysis of the rum giveaway can be found here. A longer TCS analysis of the other tax sweeteners extended under the legislation can be found here.
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