Carnival held its annual meeting this morning at a hotel on Miami Beach. But today was different from the usually dull, self-serving pontificating by cruise line executives when a group demanding that Carnival pay its fair share of taxes appeared on the scene.
An organization called "1Miami" challenged Carnival and its CEO Micky Arison to pay their "fair share" of taxes. Their presence caused an uproar with shareholders yelling at the protesters to be quiet and CEO Arison apologizing for the clamor.
Cruise lines avoidance of taxes is one of my favor topics. Cruise lines like Carnival are registered in Panama to escape U.S. taxes. According to the New York Times, Carnival paid taxes of only 1.1 percent of their $11.3 billion in profits over the last five years. The issue is a hot one after Senator Rockefeller grilled cruise line executives at a Senate hearing last month why cruise lines use some 40 federal agencies yet avoid all U.S. taxes by registering their businesses and ships in places like Liberia and the Bahamas.
This is a story I have written about a lot: Is Micky Arison A Greedy Corporate Pig? Nothing subtle here.
You can also check out some other articles No Taxes - The Cruise Line's Dirty Little Secret or Your Tax Dollars at Work - Who Pays When Things Go Wrong On Cruises?
The "controversy" was caused by the 1Miami grass roots organization simply asking Carnival to pay its fair share of taxes and help keep Miami afloat.
The Miami Herald reported Carnival's claim that it pays "head taxes" to ports around the world. But this is hardly true; its the passengers who pay the port taxes. Carnival just acts as a middle man. The Herald also writes that CEO Arison found the tax questions "insulting."
Ah, a raw nerve. Arison is very touchy about the issue of taxes. This is probably because he is the richest person in Florida. And probably because of some slick and embarrassing tax maneuvering by his father, Ted Arison.
Carnival was created by the senior Arison in the 1960's. He raked in tens of billions of dollars from tax paying U.S. passengers, exploited the hell out of Caribbean crew members, and lived the good life in Miami. But he registered his Miami-based cruise line and his cruise 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.
Carnival should have seen the protesters coming from a mile away.
Earlier in the week the 1Miami group protested about Carnival's non-payment of taxes while in small boats next to Arison's super yacht, the 200 foot Feadship Mylin IV, at the Miami Beach marina.
You can watch the video here.
Arison's personal yacht, by the way, is registered in the Cayman Islands - to avoid taxes.