Trump Poised to Bailout Billion Dollar Cruise Industry That Pays Almost Nothing in Taxes
Washington D.C. – Last weekend, as anxious American families were looking for clear guidance and safety measures from their government on the rapidly growing coronavirus threat, President Trump was fiddling on his golf course at Mar-a-Lago, “huddled with donors”. During a closed-door event on March 6th — once it apparently became clear to him the crisis was not a “new hoax” — Trump reportedly revealed what he was focused on most: a bailout for the luxury cruise industry. The industry, however, is better prepared than most to weather an economic storm as two of the largest cruise companies, Carnival Corporation & PLC and Royal Caribbean Cruises Ltd., alone posted over $5 billion in profits last year and pay their CEOs more than $10 million a year – while exploiting tax havens that allow them to pay virtually nothing in taxes.
“It’s incredibly concerning that the President is more worried about bailing out a luxury industry that’s swimming in cash rather than the 40 percent of Americans who couldn’t afford a $1,000 emergency expense before this health crisis brought widespread economic uncertainty,” said Derek Martin, director of Allied Progress. “American families cannot afford another day of inept and misguided response from this administration. Their safety and economic security should come first, not more handouts for Trump’s wealthy donors and friends. If the President is capable of stable and competent leadership, he has yet to show it.”
WHAT YOU NEED TO KNOW:
Two Of The Largest Cruise Ship Companies Made A Combined Profit Of Almost $5 Billion In 2019 While Their CEOs Each Make Over $10 Million A Year; These Same Companies Have Announced Over $3.6 Billion In Stock Buybacks And Shareholder Dividends in Recent Years.
Multiple Publications Have Reported That The Trump Administration Is Considering A Bailout Of The Cruise Line Industry.
Washington Post // Coronavirus pandemic tests clout of cruise industry and its long-standing ties to Trump
“Huddled with donors at his private Mar-a-Lago Club on Friday, President Trump told supporters that he was intent on protecting the cruise industry from the fallout of the coronavirus crisis — even as top health officials and other key advisers were privately pushing him to keep the public off the ships.”
Fox Business // What could a bailout for the cruise, hotel and airline industries look like?
“With the travel industry in a precarious situation, advocacy groups have lobbied Capitol Hill for help. President Donald Trump said Tuesday that he would be helping the cruise and airline industries, but did not provide specific details as to timing or methodology.”
Vanity Fair // Trump May Bail Out His Billionaire Oil-Industry Pals, The True Coronavirus Victims
“While no plans have been finalized…the president said Monday that he would help out parts of the economy hit by the virus, including the cruise, hospitality, and travel industries (he did not say if his own company would benefit from such assistance).”
McClatchy // ‘As Trump seeks help for cruise industry hit by coronavirus, Republicans say no bailout’
“President Donald Trump on Monday said he has plans to help the cruise and airline industries that have been “hard hit” by an outbreak of the coronavirus, as his administration sent mixed signals over whether Americans should proceed with holiday cruise plans.
“We’re working with them very, very strongly,” Trump told reporters, referring to airline and cruise line executives who have met with White House officials in recent days.
Washington Post // ‘This is not a bailout’: Mnuchin defends Trump plan to rescue firms affected by coronavirus
“Speaking to lawmakers on Capitol Hill, Mnuchin said the White House could act to provide assistance to the travel, cruise and hotel industries, which have been hammered by cancellations and a drop-off in bookings because of traveler concerns.”
In 2019, Carnival Corporation & PLC Made Nearly $3 Billion In Net Income, Its CEO Made Over $11 Million In 2018, And It Gave Over $2 Billion Back To Shareholders Through Stock Buybacks And Dividends In 2019.
In 2019, Carnival Corporation & PLC Made Nearly $3 Billion In Net Income.
In 2019, Carnival Corporation & PLC Made $2,990,000,000 In Net Income. [Carnival Corporation & PLC Exhibit 13 To Securities and Exchange Commission Form 10-K, 2019]
In 2019, Carnival Corporation & PLC’s CEO Made Over $11 Million In Total Compensation.
In 2019, Carnival Corporation & PLC CEO Arnold W. Donald Made $ 11,149,514 In Total Compensation. [Carnival Corporation & PLC, 2020 Proxy Statement, 02/26/2020]
In 2019, Carnival Corporation & PLC Gave Over $2 Billion Back To Shareholders Through $1.4 Billion In Dividends And $600 Million In Stock Buybacks.
Carnival Corporation & PLC Gave Over $2 Billion To Shareholders In 2019 With $1.4 Billion In Dividends And $600 Million In Stock Buybacks. “We continue to generate value for our shareholders, returning over $2.0 billion during 2019, $1.4 billion through our quarterly dividend and approximately $600 million through our share repurchase program.” [Carnival Corporation & PLC Exhibit 13 To Securities and Exchange Commission Form 10-K, 2019]
In 2019, Royal Caribbean Cruises Ltd. Made Over $1.9 Billion In Net Income, Its CEO Made Over $12 Million In 2018, And The Company Has Announced A $1 Billion Stock Buyback Plan And Paid Over $602 Million In Shareholder Dividends In Recent Years.
In 2019, Royal Caribbean Cruises Made Over $1.9 Billion In Net Income.
In 2019, Royal Caribbean Cruises Made $1,907,600,000 In Net Income. [Royal Caribbean Cruises Ltd., Securities and Exchange Commission Form 10-K, 2019]
In 2018, Royal Caribbean Cruises’ CEO Made Over $12 Million In Total Compensation.
In 2018, Royal Caribbean Cruises CEO Richard D. Fain Made $12,422,715 In Total Compensation. [Royal Caribbean Cruises Ltd., 2019 Proxy Statement, 04/18/2019]
In 2019, Royal Caribbean Cruises Paid Over $602 Million In Shareholder Dividends And In 2018, The Company Announced A $1 Billion Stock Buyback Program.
In 2019, Royal Caribbean Cruises Held $100 Million In Stock Buybacks As Part Of A $1 Billion Share Repurchase Program It Announced In May 2018. “In 2019, we bought back $100.0 million in shares of common stock and have $600.0 million remaining under our $1.0 billion share repurchase program that was announced in May 2018.” [Royal Caribbean Cruises Ltd., Securities and Exchange Commission Form 10-K, 2019]
In 2019, Royal Caribbean Cruises Paid Over $602 Million In Shareholder Dividends. In its 2019 annual report, Royal Caribbean Cruises disclosed it paid $602,674,000 in dividends. [Royal Caribbean Cruises Ltd., Securities and Exchange Commission Form 10-K, 2019]
Rep. Peter DeFazio Has Argued Consideration Of A Bailout For Cruise Companies Would Be “‘Premature,’” Since They “‘Don’t Pay Taxes’” In The U.S.
Rep. Peter DeFazio (D-OR) Has Pointed Out That Consideration Of A Bailout For Cruise Companies Would Be “‘Premature’” Since They “‘Don’t Pay Taxes’” In The U.S.
Rep. Peter Defazio (D-OR) Argued It A Bailout For The Cruise Industry Would Be “‘Premature,’” Since Cruise Companies “‘Don’t Pay Taxes’” In The U.S. “Rep. Peter DeFazio, D-Ore., the chairman of the House Transportation and Infrastructure Committee, agreed it would be ‘premature’ to discuss a bailout of the cruise line industry, particularly an industry that is tax-exempt. ‘They don’t pay taxes in the United States of America. If they want to reflag their ships … and they want to hire U.S. crews and pay U.S. wages and pay U.S. taxes, then maybe,’ he said.” [Emma Dumain, Michael Wilner, and Taylor Dolven, “Cruise safety over bailout is White House focus for industry amid coronavirus,” Miami Herald, 03/10/20]
The Cruise Industry Has Enjoyed A “Long-Standing Exemption From Taxes On Most U.S. Income,” Despite Many Being Headquartered In The U.S. And Relying On U.S. Ports—Carnival Corp. Has Recently Paid An Effective Tax Rate Of Just 1.7%.
The Cruise Industry Has Had A “Long-Standing Exemption From Taxes On Most U.S. Income”—Although They Sail From U.S. Ports And Have U.S. Headquarters.
The Cruise Industry Has Had A “Long-Standing Exemption From Taxes On Most U.S. Income,” “The cruise industry’s long-standing exemption from taxes on most U.S. income is under assault again, but this time the fire is coming from an unlikely direction: Republicans in the U.S. Senate. […] The Senate has included a partial repeal of Sections 873 and 883 of the tax code, which exempt foreign companies from paying U.S. taxes on income derived from shipping activity, including cruises.” [Tom Stieghorst, “Senate Republicans take aim at cruise tax exemption,” Travel Weekly, 11/20/17]
“Nearly All Major Cruise Lines Sailing From U.S. Ports Are Incorporated In Foreign Countries Despite Having Headquarters Here.” [Tom Stieghorst, “Senate Republicans take aim at cruise tax exemption,” Travel Weekly, 11/20/17]
The Cruise Industry Only Pays U.S. Income Tax On Its Activity On U.S. Land—“A Relatively Small Figure”—Carnival Corp.’s Effective U.S. Tax Rate In 2016 Was Just Above 1.7%.
Major Cruise Companies “Only Pay U.S. Income Taxes On Sources Of Income Derived From U.S. Land Activities […] A Relatively Small Figure”—In 2016, Carnival Corp. Only Paid An Effective Tax Rate Of “Just Over 1.7%.” “As such, they only pay U.S. income taxes on sources of income derived from U.S. land activities, such as the operation of lodges in Alaska, a relatively small figure. Carnival Corp., for example, paid $49 million in taxes in 2016 on income of $2.8 billion, an effective rate of just over 1.7%.”[Tom Stieghorst, “Senate Republicans take aim at cruise tax exemption,” Travel Weekly, 11/20/17]
The Cruise Line Industry Has Donated Nearly $10,000 In Political Contributions To Donald Trump.
The Cruise Line Industry Donated $9,293 To Donald Trump And His Associated Campaign Committees During The 2016 Election Cycle. [“Cruise Line Industry Top 20 Recipients 2016 Election Cycle,” OpenSecrets.org, accessed 03/10/20]
The Cruise Line Industry Has Donated $483 To Donald Trump And His Associated Campaign Committees During The 2020 Election Cycle So Far. [“Cruise Line Industry Top 20 Recipients 2020 Election Cycle,” OpenSecrets.org, accessed 03/10/20]