Monday, April 4, 2011
Senator Sanders: Carnival Cruise Lines Among Top 10 Tax Avoiders
Senator Bernie Sanders (I-Vermont) lists Carnival Cruise Lines as one of the top 10 corporations who engage in tax avoidance.
According to Sen. Sanders, Carnival earned more than $11 billion in profits over the last five years, but its federal income tax rate during those years was just 1.1 percent.
Like its competitors, Carnival hires foreign workers to staff its cruise ships that are homed in U.S. ports to avoid U.S labor laws and taxes.
Pictured above: Carnival Cruise Lines' Carnival Dream
Also like its competitors, Carnival registers its ships to foreign registries such as Panama to avoid paying U.S. taxes.
Although Carnival is named by Sen. Sanders as among the top 10 tax avoiders, Carnival reaps enormous benefits of both federal and state tax dollars for its operations, for example:
1. Seaports receive Homeland Security grants which subsidizes sea port security and police departments, which reduces the amount needed to be paid by port tenants to support these agencies.
2. Seaports receive billions in federal and state subsidies for infrastructure projects such as the roadway project currently underway for the west basin of Port Canaveral rather than requiring the main beneficiaries of the project (cruise lines) to pay for the entire project.
3. Cruise lines receive the benefits of the U.S. Coast Guard and U.S. Navy (it was after all, the U.S.S. Ronald Reagan that came to the aid of the disabled Carnival Splendor last year, not the Panamanian navy).
So despite the rhetoric by federal and state politicians in both parties to save and create jobs for Americans and Floridians, the actual policy that is carried out is that the cruise line industry is subsidized by federal and state dollars while paying little in taxes and employing foreign workers.
A quick fix to this undeserved subsidy would be to tax all cruise lines $400 per passenger for cruises that depart from U.S. ports if the ship is of foreign registry and employs less than 75% of U.S. citizens on its staff.
Such a tax would off-set the tax subsidies the cruise lines receive while encouraging cruise lines to hire U.S. workers and would open up several thousand jobs for Brevard County residents in Port Canaveral alone.