At this moment the 210 foot Coast Guard cutter Vigorous is escorting the disabled Carnival Triumph back to the U.S. The Coast Guard performs a remarkable job responding to emergencies such as cruise ship fires and the numerous helicopter medevacs involving ill or injured passengers who need medical treatment back here in the U.S.
But who pays for these services?
Cruise lines have no obligation to pay the Coast Guard or other U.S. federal agencies for services like this. Most people don’t know this. Many people also don’t realize that the cruise industry pays no U.S. federal taxes because companies like Carnival and Royal Caribbean are registered in foreign countries like Panama and Liberia and fly the flag of countries like the Bahamas. The industry collects around $35 billion a year, mostly from tax-paying U.S. citizens. But unlike you or me, the cruise lines are essentially exempt from paying the U.S. government anything on all of the billions and billions it collects each month.
So when it comes to paying for a Coast Guard escort of a foreign flagged ship back to an American port, you pay. That’s right. Joe the plumber pays. Even though the cruise lines pay no federal taxes and you do, you pay. Even when the cruise ship fire occurs due to the negligence of the cruise line, you pay.
Remember the last cruise engine fire which disabled the Carnival Splendor in November 2010? The U.S. sent out an aircraft carrier (U.S. Ronald Reagan) and various U.S. Coast Guard vessels. You paid for all of that too.
The CEO of the International Cruise Victims (ICV) organization Ken Carver, requested information from the U.S. Navy and the U.S. Coast Guard pursuant to a Freedom of Information Act ("FOIA") request. The U.S. Navy timely responded to Mr. Carver’s FOIA request. The Navy disclosed that it delivered 60 pallets, weighing over 37,000 pounds, of "bread, luncheon meat, pop tarts, canned crab, water and paper plates."
Considering the cost of positioning an aircraft carrier, dispatching multiple aircraft and helicopters, and delivering tons of food and water to be dropped onto the cruise ship, the Navy stated that it spent $1,884,376.75 responding to the fire aboard the Carnival Splendor cruise ship.
This figure does not include the costs incurred by the U.S. Coast Guard in responding to the crisis. Unfortunately, the Coast Guard has not yet provided any information in response to Mr. Carver’s FOIA request dating back to earlier last year.
The Coast Guard’s costs were undoubtedly another $2,000,000 or so in personnel and fuel costs for their vessels and helicopters.
I mentioned this issue last year in an article Your Tax Dollars At Sea – Who Pays When Things Go Wrong on Cruises?
So here we are again with another foreign-flagged cruise ship disabled due to fire, operated by a foreign incorporated cruise line which pays no U.S. income taxes calling on good ole Uncle Sam to spend a few million dollars to bail it out.
Its time to re-examine why these cruise lines collect billions but pay no taxes and why you and me have to pay when their cruise ships catch on fire on the high seas and they call on U.S federal agencies for help.