The cruise lines take advantage of an obscure provision in the U.S. tax code which permits shipping companies to evade taxes by incorporating overseas and flying the flags of foreign countries. That's why Carnival is incorporated in Panama, Royal Caribbean is incorporated in Liberia, and Princess Cruises is incorporated in Bermuda.
The Carnival Corporation wouldn t have much of a business without help from various branches of the government. The United States Coast Guard keeps the seas safe for Carnival s cruise ships. Customs officers make it possible for Carnival cruises to travel to other countries. State and local governments have built roads and bridges leading up to the ports where Carnival s ships dock.
But Carnival s biggest government benefit of all may be the price it pays for many of those services. Over the last five years, the company has paid total corporate taxes federal, state, local and foreign equal to only 1.1 percent of its cumulative $11.3 billion in profits . Thanks to an obscure loophole in the tax code, Carnival can legally avoid most taxes.
Carnival was created by Ted Arison (father of current CEO Mickey Arison, photo right). Senior Arison collected billions of dollars from tax paying U.S. passengers and lived the good life in Miami. But he registered his Miami-based cruise line and his cruise paradise island bahamas hotels ships in Panama to avoid U.S. taxes. In 1990, he abandoned Miami, denounced his U.S. citizenship , and returned to Israel with his billions in a ploy to avoid estate and inheritance taxes.
The Miami-based cruise lines file papers paradise island bahamas hotels of incorporation and vessel registration in distant countries where no one will bother them with things like income tax, wage and labor laws, or safety regulations. They then collect paradise island bahamas hotels billions of dollars a year from hard working saps - the U.S. tax paying public.
Yes, Arison had dual citizenship, Israeli - U.S. But he gave up his U.S. citezenship and gave up living here. (There is no inheritance tax if you give up your citizenship and leave the U.S. and then die over ten years later.) He died nine years later. Sounds like bad luck to me.
Legally paradise island bahamas hotels we can't tax foreign (cruise ships)corporations, but we can impose other charges for services rendered...such as medivac's and any other service provided by the US Coast Guard, sanitary inspections by CDC's Vessel Sanitation Program. Make them pay for roads and port expansion to accomadate their business. Walmart usually pays cities to provide access roads and traffic signals. paradise island bahamas hotels Although paradise island bahamas hotels they usually name the street Walmart Way. So why not have a Costa Way, Holland America Avenue, or Carnival Lane as long as they pay their fair share of the costs to enhance paradise island bahamas hotels their business.
We live near the port of Tampa and have been on several RCI and Carnival cruises. They charge us tax, but pay none of there own? And they are not even US based corporations even though they have US based terminals? Good bye Carnival and RCI.
The cruise lines charge passengers for taxes and government fees - which they in turn pay to the governments of the countries paradise island bahamas hotels their ships visit. The cruise lines pay quite a bit in port fees at each port they visit (including US ports). They do not pay much in US federal tax because they are not US companies. Whats the point in this article here? So what? Brazilian underwear companies don't pay US federal taxes either paradise island bahamas hotels - because they are not US companies. It seems pretty simple to me.
I'm with Howard. If the loophole exists, why not take it? I love Carnival and am proud that an afforable, fun vacation option like cruising is available. I don't consider myself a "sap" as the article says just because my money is going to a corporation that is smart enough to avoid taxes. If the cruise corps had to pay U.S. taxes they would be forced to raise fares. I am thankful that Ted Arison took the risks to build his company. I also think it is awesome that Carnival provides thousands of jobs to people, some which are most likely from poor countries with little opportunity. The crew members that I have spoken with personally seem like grateful, hardworking people who sacrifice time with their families and personal comfort to give those at home a better life. The cruise industry has also created paradise island bahamas hotels many jobs at ports-of-call in poor countries.
My son worked on one of Carnival Cruise paradise island bahamas hotels vessels registered in Panama. He is a US citizen and his payroll stub shows a deductions for federal taxes. Where the heck did that money go??? Should he be expecting a W-2 to file through paradise island bahamas hotels IRS or does he need to go through Panama for his return? Either way, he's entitled to a full refund.
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