Carnival's Deal with FEMA

[nitterm]

While it sounded good at the time, Carnival's contract to provide 3 cruise ships to be used for six months to house people displaced by the hurricane's this morning's edition of the San Francisco Chronicle details just how much a "sweetheart" deal it was. Not for the people displaced but for Carnival.

 

While Carnival corporation is headquartered in Miami, the company is incorporated in Panama which means that on $1.9 billion revenue for 2004 Carnival only paid $3 million in federal taxes.

[jpancake]

This is a GOOD thing. It keeps fares low and competitive. Corporate "taxes" are passed on to consumers in the form of higher cruise fares and higher prices for onboard goods and services.

[SharkieRools]

I dunno, I don't think it's really that bad of a deal IF the ships were filled to capacity. You can't blame Carnival for not filling the ships. Carnival wasn't the one running to FEMA to charter the ships, it was the other way around.

 

The article states that at capacity the average berth would cost $1275 a week, although a cruise out of Galveston can be had for $599 a person. Of course the $599 is the lowest price available,what about suites, balconies, etc. That would certainly drive the average cost per berth up to much more than $599. They also are losing out on onboard revenue such as the casinos, photography, bingo, shopping, shore excursions, etc.

[spongerob]

I think this is yet another example of someone in the press writing a story to fit an agenda, and using only the facts that fit. Good call on the $599 lowest rate, Sharkie. Also, consider that the ships will not be in service during the many holidays (fall breaks, Thanksgiving, Christmas, New Year's). The deal was made when there were real concerns about what to do with the many people who needed housing, and the realities that developed once things settled down were somewhat different.

 

I think, too, that people should remember that the CEO of CCL, Mickey Arison, personally donated well over $2 million to tsunami relief efforts, and will likely be a large contributor to relief efforts in the gulf coast as well.

[Pam in CA]

I read that they were putting emergency personnel and people there to help rebuild the city on the ships, not displaced people from the Superdome. It puts them where they need to be and provides them with living quarters. If they had to put them up in a hotel and feed them, it would cost more and they'd have the logistics of getting them in and out of the city every day.

 

I also read in CND that the ships being leased will all have a major refitting before going back into regular service.

[madelinerose]

...and??? :confused:

 

While it sounded good at the time, Carnival's contract to provide 3 cruise ships to be used for six months to house people displaced by the hurricane's this morning's edition of the San Francisco Chronicle details just how much a "sweetheart" deal it was. Not for the people displaced but for Carnival.

 

While Carnival corporation is headquartered in Miami, the company is incorporated in Panama which means that on $1.9 billion revenue for 2004 Carnival only paid $3 million in federal taxes.

[woodofpine]

You don't think "heck of a job" moron Mike Brown was going out-negotiate Mickey Arison - heck Peter Ratliffe could've fleeced Brown and look what happened when he tried to out maneuver Arison...

 

I don't doubt the money being paid Carnival doesn't fairly reflect alternative revenues. Carnival's just getting a windfall due to FEMA under utilization of the ships. The spot light on (perfectly legitimate) cruise line tax avoidance won't help the industry though. The rest of the lines are structured similarly and every share holder of the lines benefits accordingly, and those shareholders pay income tax on the dividends so its not like Uncle Sam isn't getting its slice - its just not getting two slices...

 

There's an Alice in Wonderland quality to the criticism. We should be upset that Carnival does pay more taxes because we all know what a great steward of our tax dollars the federal government is... be it in Bahgdad or Biloxi...

[nitterm]

Thank you WOODOFPINE thats the message I was trying to get across. A corporation with $2 billion in revenues pays just $3 million in federal taxes. Whats that a tax rate of 0.002%. I'm sure Carnival would have agree to anything FEMA proposed just to keep its tax rate so low!

[SRQfireman]

Here's more info <http://www.washingtonpost.com/wp-dyn/content/article/2005/09/27/AR2005092701960.html>

[chrysalis]

I'm sure Carnival would have agree to anything FEMA proposed just to keep its tax rate so low!

 

Huh??????

[spongerob]

Thank you WOODOFPINE thats the message I was trying to get across. A corporation with $2 billion in revenues pays just $3 million in federal taxes. Whats that a tax rate of 0.002%. I'm sure Carnival would have agree to anything FEMA proposed just to keep its tax rate so low!

 

And, what tax rate, pray tell, does RCCL pay? Just curious.

[samtesla]

This is a GOOD thing. It keeps fares low and competitive. Corporate "taxes" are passed on to consumers in the form of higher cruise fares and higher prices for onboard goods and services.

 

I beg to differ. If some organizations are not paying their fair share we all end up paying for it in one way or another. Sure, it's nice to get a balcony cabin for $699, but when your town's, school's, or state's federal money dries up, you can thank the $699 balcony cabin for it.

 

Two years ago we cheered the tax cuts of the current administration, only to turn around and mail the entire refund check to added property taxes.

[Kissara22]

Last time I checked, education and property taxes were assessed on a state level, not a federal level.

[Chat Noir]

I beg to differ. If some organizations are not paying their fair share we all end up paying for it in one way or another. Sure, it's nice to get a balcony cabin for $699, but when your town's, school's, or state's federal money dries up, you can thank the $699 balcony cabin for it.

 

Two years ago we cheered the tax cuts of the current administration, only to turn around and mail the entire refund check to added property taxes.

 

I'm in agreement with the post just prior to my post, property taxes are not assessed by the federal government. I don't think that loss of money from a balcony cabin has lead to money drying up. Do you really want more taxes on top of the taxes you already pay when you book a cabin?

 

The money from the cabin I just booked? It was taxed when I earned it, and I paid gov't fees and taxes when I spent it for the cruise. Everything I earn is taxed prior to me receiving one cent, and everything I spend is taxed at the moment of sale.

 

Here's a link to an short article on Tom Coburn, who has an excellent idea for acquiring some monies to help clean up after Katrina.

 

http://www.ktul.com/news/stories/0905/263707.html

[britsbest]

There was an item on TV news here saying that the ships only half full there by doubling the rate per "resident" to over 3000 dollars a week.

[Opinions]

Last time I checked, education and property taxes were assessed on a state level, not a federal level.

 

The federal government is sending less of our tax dollars back to the states and cities...As a result local governments raise taxes to help pay for mandated programs...In our state education and property taxes are assessed on local not state level.

[samtesla]

Last time I checked, education and property taxes were assessed on a state level, not a federal level.

 

Lots of federal money is granted by the Feds to the states, schools, cities, colleges, etc. Not that I'd ever want to live in North Dacota, but Google (http://www.dpi.state.nd.us/grants/grntdesc.shtm) reveals just what kind of federal money they're getting. And such money is usually the first to be cut from the fed budget, leaving the states or schools with the responsibility to run the program and no money or reduced money to run it. (as in, unfunded mandates).

 

Cities depend on federal grants for things like law enforcement, public safety, training, etc. Programs for at-risk children, rehab, re-training, etc.

 

States also depend on the feds for all of the above (things like college money, student aid) as well as construction projects, roads, etc.... Here's something at the state level for Arizona http://www.azcfrc.az.gov/secure/cffr.pdf

 

When federal money dries up, the program is not cancelled, and local and state as well as property taxes, all much easier to go up, do go up.

 

Every state collects federal taxes and every state receives federal money back. Some states break about even, many send up more than they get back, or the other way 'round. Again, one does not have to be a rocket scientist to see that if there's less fed money coming in, that local taxes will be raised.

[SharkieRools]

There was an item on TV news here saying that the ships only half full there by doubling the rate per "resident" to over 3000 dollars a week.

 

True, but this is not Carnival's fault. They fully intended for all cabins to be occupied, if anything it's the Feds fault for deciding to charter 3 entire ships.

[nitterm]

and just to make this a clean sweep, today's newspapers are reporting that Carnival went to Treasury secretary John Snow asking for a waiver on all taxes it pays. Talk about a "free ride"

[jpancake]

I beg to differ. If some organizations are not paying their fair share we all end up paying for it in one way or another. Sure, it's nice to get a balcony cabin for $699, but when your town's, school's, or state's federal money dries up, you can thank the $699 balcony cabin for it.

 

Two years ago we cheered the tax cuts of the current administration, only to turn around and mail the entire refund check to added property taxes.

 

That's what state and property taxes are for. Less federal money means that my state is free of the stipulations and controls that come with it. To me, that is an added bonus. I would much rather be taxed at the local level than the federal level. Not only is there more accountability, localities must compete for your "business".

[RodneyG]

If the Co is not USA registered and earns its revenues in international waters in international ports with an international crew and passengers why should it pay any USA tax on its revenue?

[Opinions]

If the Co is not USA registered and earns its revenues in international waters in international ports with an international crew and passengers why should it pay any USA tax on its revenue?

 

If they don't want to pay any U.S. taxes let them homeport their ships in one of those international ports...If most of their business is on ships sailing from the U.S. perhaps they should pay their fair share...But there are enough loopholes in the federal tax system it probably will never happen.

[nitterm]

Because it derives 95% of its revenue from the US? I dont pay my fare to a location on the high sea do I?

[spongerob]

It is you, and I, as consumers who ultimately pay ALL the taxes. Those include the port fees assessed at each home port. Be careful what you wish for!

[chrysalis]

If they don't want to pay any U.S. taxes let them homeport their ships in one of those international ports...

 

I wonder how many direct and indirect jobs (and all the income taxes associated with them) would be lost if all of those ships homeported outside the US?

 

I wonder how many people would be unable to cruise because they were unable to travel to those international ports?

 

As spongerob states, be careful what you wish for.......