July 2023


Back in 1780 Benjamin Franklin famously wrote that nothing is certain except death and taxes.  With all due respect for  the author of Poor Richard’s Almanack and the founder of The Library Company in Philadelphia,  I have to quibble.  While death is inevitable and certain for everyone who has ever lived, taxes are not. As is well known, there are some individuals and entities that pay more in taxes than others; and some that are totally exempt from taxation.

The Professional Golf Association (PGA), for example, is exempt under Section  501 (c) 6 of the Internal Revenue Code and pays no federal income tax.  Breweries, on the other hand,  not only  pay all of the taxes to which other businesses are subject (income, property, sales etc.); but we also pay excise taxes and licensing fees applicable to us alone.

The rationale seems to be that some organizations (schools, hospitals, museums etc.) are so beneficial to society that they should be exempt from taxation.  Running  extraordinarily  lucrative golf tournaments for highly compensated professional athletes is  presumably regarded as such a socially beneficial activity. At the same time some entities, such as breweries, are so disfavored that we are subject to  so-called “sin taxes”, extra levies that are ostensibly imposed as a disincentive to consumers of our products.

Not available in Saudi Arabia.

This picture has been complicated by the pending merger between the PGA and LIV Golf, a rival tour owned and controlled by The Saudi Public Investment Fund (PIF), which is a Sovereign Wealth Fund (SWF) that is in turn owned and controlled by The Kingdom of Saudi Arabia.  Like many alert readers (ARs) I was surprised by the PGA’s apparent 180 degree change from condemning PIF for funding terrorists to welcoming it as a desirable and reputable business partner.  I would never dare to question the integrity of the PGA or be so cynical as to suggest that its allegiance could be swayed by an infusion of billions of petro-dollars from  a medieval monarchy.

In addition to supporting terrorists around the world, Saudi Arabia has draconian laws against the consumption of alcohol inside its borders, with severe punishments that can include heavy fines, lengthy prison terms and public flogging. In other words, even if we at Schlafly wanted to do business in Saudi Arabia, which we most assuredly do not, we would not be allowed to do so.

It’s finally worth noting that as an SWF  The Saudi PIF enjoys a statutory  exemption from taxation of all interest, dividends and capital gains earned in The United States. I probably don’t have to remind any ARs that most of us who are not as well-heeled as foreign princes do not enjoy such an exemption.

What this is means is,  taxes are not a certainty for Saudi royals investing in US businesses like a golf tour.  Death, however is definitely a certainty for victims of Saudi terrorism funded by these tax-free petro-dollars, including those who were killed on 9/11.





Tom Schlafly
Chairman – The Saint Louis Brewery