Carnival Cruises pays paltry 0.6% in US taxes – let it rescue its own ships

Carnival Cruises should start paying its fair share, according to US Senator Jay Rockefeller (D-WV).

You see, Carnival smartly registers its boats in foreign ports, so they only pay only 0.6% a year in US taxes.

Yet, every time a Carnival ship has a problem at sea, who do you think comes running to the rescue?  The US Coast Guard. And it’s costing US taxpayers millions.

Well, Senator Rockefeller has had enough, and is demanding that Carnival start paying its own way.

A Whopping 90 Distress Calls from Carnival Cruises

If Carnival ships are going to have a whopping 90 distress calls over a five year period, costing US taxpayers millions – while Carnival pays next to nothing in US taxes because it doesn’t consider it’s an American company – then Carnival can start paying for its excessive number of rescues, says Rockefeller.

Carnival Cruise Ship

Carnival Cruise Ship

Rockefeller said in a letter to Carnival that even after so many accidents, “I see no evidence that the company has undertaken any meaningful course of corrective action to improve its safety record.”  In other words, it’s Carnival’s fault that the Coast Guard and US Navy have to spend millions bailing them out of trouble, so Carnival should pay for it.

US Taxpayers Paid $3.3m for A Single Carnival Cruise Rescue

And the costs are darn high.  Rockefeller says that for one recent Carnival rescue it cost the US Coast Guard and US Navy $1.5 million and $1.8 million respectively.

Carnival responded and basically told the Senator to shove it.

In recent months, Carnival Cruise lines have been in the news a lot for all of the wrong reasons.

Last year, they came up with a nutty excuse for banning drag queens on their drag cruises because of “9/11 anti-terrorism policies.” Uh huh. And earlier this year, the “fun cruise” was dubbed the “poop cruise,” following problems at sea that left their ship adrift for a week.

If We Have to Tighten Our Belt, Why Doesn’t Carnival Cruises?

In addition to concerns over Carnival’s safety record – and the argument that they should pay for these rescues because but-for their only negligence, there wouldn’t need to be a rescue – there’s also the question of “austerity.”

These aren’t typical times. These are extreme times when Republicans, with the assistance of far too many Democrats, want to question every cent spent (unless it’s a handout to Big Oil, Big Banks, or Big Pharma – that’s all okay). The political class has written countless loopholes into the system that benefit those least in need, while squeezing the middle class and the poor. Handouts to the rich are a national necessity, but any benefits provided to anyone else – like Social Security, Medicare and Medicaid – are “freeloading.”

In the case of Carnival Cruise lines, it’s an American company, though most of its ships are registered in Panama in order to avoid more stringent US laws and US taxes. As we know, Carnival isn’t the only one to pull that trick. Let’s not forget that the current Secretary of the US Treasury, Jack Lew, stashed money in the Cayman Islands, and failed presidential candidate Mitt Romney stashed millions offshore as well. It’s what the 1% do, and everyone in town accepts it.

Oscar Mayer Wienermobile. Photo by Jonathunder via Wikipedia (GNU Free Documentation License)

Oscar Mayer Wienermobile. Photo by Jonathunder via Wikipedia (GNU Free Documentation License)

For me, if those on the right (regardless of party or political office) – including far too many corporate leaders – weren’t so obsessed with hacking into the already-weak US social safety net, Carnival’s mooching would be less of an issue. But we all know that’s not how it works. Blowhards like Paul Ryan brings their vast business experience as the driver of the Wienermobile, and his economic theories learned at the suburbanite-infested upper-middle-class Miami University.

It doesn’t seem right that elderly Americans are being denied urgent cancer treatment, which John wrote about this morning, while corporate America is rolling in money – Carnival made $11 billion in profits from 2007 to 2011, and paid around 1% in taxes – yet those who are in need for life saving treatment are being left out.

Carnival Refusing to Reimburse US Taxpayers

Should Carnival expect to be given handouts like this or are they right to refuse a request to pay millions for rescuing their ship?

Carnival had no issue accepting $236 million from Uncle Sam to provide accommodations for victims of Hurricane Katrina, even though most outside observers found the charges to be exorbitant. Suddenly, Carnival was a proud American company when a quarter of a billion dollars was on the line.

Maybe it’s not even fair to criticize Carnival because everything they did was legal, and it’s not like they’re the only company sucking at the federal teat while avoiding as many taxes as it can.

But when elderly cancer patients are being turned away from their chemotherapy because Republicans claim we just have no choice but to cut the budget, why are we spending a million bucks a shot rescuing a boat that isn’t even American?  Next time Carnival has a problem, I’m sure one of the five ships in the Bahamian Navy will be happy to offer assistance.

An American in Paris, France. BA in History & Political Science from Ohio State. Provided consulting services to US software startups, launching new business overseas that have both IPO’d and sold to well-known global software companies. Currently launching a new cloud-based startup. Full bio here.

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