Hurting Hometown Eyes Tax on Jack Daniels

If ever there was a “company town,” it is Lynchburg, Tenn.

Jack Daniel’s and Lynchburg have been inseparable since a young man named Jack Daniel came there more than a century ago to learn the art of distilling corn mash into whiskey. He set up shop on the northeastern end of town and the company has never looked to go anywhere else. It produces 23 million gallons of amber gold – about a billion dollars worth, every year.

But the company’s deep pockets make it a prime target for a local government that is strapped for revenue – and now a private citizen wants to slap the storied whiskey producer with a $10 tax on each and every barrel the distillery fills.

“We are entitled to more money from the only industry in the county – Jack Daniel’s distillery,” said Charles Rogers, a 75-year-old retiree and self-described “concerned citizen” of Moore County – home to Lynchburg and Jack Daniel’s.

Rogers wants the proposed tax to pay the bills for new schools, roads, bridges, even a new water treatment plant.

Rogers says Moore County is “entitled” to more money because Jack Daniel’s used bucolic images of small-town life in Lynchburg to sell its product. And as Norman Rockwell made a living off of his iconic images of Americana, so too should Lynchburg, according to Rogers.

“They (Jack Daniel’s) created the image of this little old hamlet down here being the place where this fantastic whiskey is being made,” Rogers said. “And the people didn’t realize what was going on. They were being marketed all over the world as ‘the place.’”

In the same way a film company would pay ‘usage’ fees for a location, Rogers believes Jack Daniel’s should too. It’s a way, he says, of giving back to the community.

That idea infuriates Jack Daniel’s management. The distillery is Moore County’s largest employer. It accounts for a third of its tax base. And already, nearly 60 percent of the price of a bottle of Jack Daniel’s is in some form of tax. General Manager Tommy Beam says where does it stop?

“It’s a job killer because it ups our costs. We’re competing in a global marketplace,” Beam said.

The tax would add about 3.4 cents to the price of a bottle of JD. While that doesn’t seem like much on the surface, considering the distillery sells more than 100 million bottles of whiskey every year, it quickly adds up to about $4 million a year. That’s a million dollars more than the entire county budget. And a cost, says Beam, that could affect the company’s growth.

“We have been able to hire 25 or 30 people in the last four or five months. And if our costs go up $4 or $5 million dollars, that’s probably going to make us a little less competitive. So, we might not grow as much,” Beam said.

That argument rings hollow for Rogers. He figures the company could easily tack a nickel on to the price of a bottle, recover the tax and make a little money in the process.

And there’s another thing that really bugs Rogers. The Jack Daniel’s distillery attracts tourists. Lots of them. About a quarter of a million every year. More than 20,000 are expected this weekend alone for the Jack Daniel’s World Championship Invitational Barbecue Competition.

“We get 25, 30,000 people coming in here, we can’t even move around,” Rogers said. “There’s no place to park. Traffic is backed up sometimes a mile or two up the road.” He told the story of a pensioner who couldn’t find a place to park at the courthouse. She left her car in the middle of the road, saying ‘Maybe the sheriff can find a place to park it’.

The Moore County Council passed a measure this year asking the Tennessee Assembly for enabling legislation to put the question of a barrel tax on the ballot. Rogers is hoping to get it on in time for the presidential primary next March. But there’s a real divide among business owners. Some are for it, others are wary of biting the hand that feeds them. Those tourists bring lots of dollars with them.

Could the company possibly move to a more tax-friendly county? Most folks think not. But Lynchburg Mayor Sloan Stewart isn’t so sure.

“Everybody says no they won’t. You can’t say no they won’t. That’s always a possibility,” he said. “There’s a chance they could do something like that, pack up and move.”

Beam, the general manager of Jack Daniel’s, says a move certainly wouldn’t be his first choice. Jack Daniel’s likes it here – even revels in the idea of producing top-shelf whiskey in a county that’s been dry since prohibition.

But Beam thinks the idea of taxing someone just because they’re successful is fundamentally unfair.

“That’s not free enterprise and that’s not what this country was built on,” he said. “I saw a quote the other day that said that a person used to look at a successful person and say now, what do I have to do to become like that? Whereas now, they might look at him and say, what can I do to get what they’ve got.”

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Obama Gets More Donations From Hurting Areas

Donations to President Obama's re-election campaign from voters in the most economically distressed areas are up, according to a new analysis, even as the average-size donation is down and Republicans also fare well in regions that haven't typically given record amounts.

According to an Associated Press analysis, Obama's fundraising in the second and third quarters of this year from areas with typically high unemployment are up from this time over the 2007 fundraising cycles, when candidate Barack Obama raised $81 million between April 1 and Sept. 30 as the country was barreling into a recession.

While Obama reported this week his campaign and the Democratic Party raised a combined $70 million for his re-election bid this quarter -- more than the $21 million raised by Obama's campaign in the third quarter of 2007 --  similar fundraising totals for the GOP field point to growing support for candidates promising to change the country's direction.

The new numbers suggest the nation's 9.1 percent unemployment rate doesn't automatically hurt the president, even as Republicans trying to make the jobless numbers a central issue in his re-election. 

Republican contenders' campaigns raised a total of roughly $52 million in the third quarter, with Texas Gov. Rick Perry and former Massachusetts Gov. Mitt Romney taking the lead in drawing support from across the country.

Republican candidates have missed few chances in recent weeks to point fingers at Obama and his jobs record.

"Right now, America's in crisis," said Romney at an Oct. 11 Republican debate devoted exclusively to the economy. "You want to have someone who's smart, who has experience, who knows how the financial services sector works, who knows how to protect American jobs -- and I do. I've done it."

Among Obama's supporters, however, there has been an uptick in donations from both Democratic- and Republican-leaning counties, even as more than one in 10 people are out of work in those places.

In the Detroit area, where unemployment has exceeded 14 percent, supporters wrote hundreds of more checks -- albeit in smaller amounts when adjusting for inflation -- to Obama's campaign than the same period in 2007.

The AP's review drew upon unemployment figures from the U.S. Bureau of Labor Statistics and Census Bureau estimates, excluding donations from interest groups. Although campaign finance reports don't capture donors who gave less than $200 per election cycle, the donations reflect in part the attitudes among supports who give in the $200 to $2,500 range, making up nearly 40 percent of Obama's fundraising this period.

"I believe in the ideas that he has for the country," said donor Barbara Weeda, a 70-year-old retiree from Joshua Tree, Calif., home to San Bernardino county and its 13 percent jobless rate. 

"How else is he going to get elected than to just dig in and help as much as you can?" she said, saddened at what she sees as a lack of cooperation in Washington negotiating a jobs bill.

Obama campaign manager Jim Messina said in an email to supporters this week that more than 600,000 people donated to the campaign since July, more than the previous three-month cycle.

In a video to supporters released Saturday, Obama said the campaign was close to 1 million individual donors for the 2012 campaign.

"That's a million people taking ownership of this campaign $5 and $10 at a time. Each one of those people has a story about why they gave," he said, noting that he's making personal phone calls to random donors to thank them for their support.

The AP's analysis also doesn't count big-money bundlers, the people who raise cash on behalf of a candidate and turn it in as large increments. According to the Center for Responsive Politics, 244 bundlers are raising at least $34,950,000 for Obama's re-election efforts. In all, the president has raised $96 million so far this election cycle.

But the AP analysis found not only a broadening of support for Obama -- he received cash for the first time from parts of the Plains, the Rockies and the Midwest -- but also a wide appeal for top GOP contenders Romney and Perry.

Romney, the Republican candidate who has raised the most so far, has grabbed $32 million in cash. Perry raised nearly $17 million in under eight weeks.

Campaign finance reports released Friday and Saturday revealed the first complete picture of the presidential field, showing a haves and have-nots among the Republican candidates. While Romney and Perry brought in more than $30 million in combined contributions this quarter; other candidates raised remarkably less, and some were mired in debt.

Still, the campaign figures didn't capture the tens of millions raised by new, outside groups known as super political action committees, which can collect unlimited amounts of money to influence elections. Obama and leading GOP candidates all have super PACs working in their favor, not counting independently operating interest groups that are unlimited in the amount they can raise.

The Associated Press contributed to this report.

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