Posted on: August 12, 2013
Tax -- and tax again
We'll say this about Sen. Jay Rockefeller (D-W.Va.): He's a man of his word.
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When he said he wanted to tax the cruise lines, he wasn't kidding. Not only did the chairman of the Senate Commerce Committee introduce a bill that would subject the U.S. earnings of foreign-flagged cruise lines to U.S. corporate income taxes, he threw in a top-line gross receipts tax for good measure.
Rockefeller's plan regarding income tax relies on a fairness argument. As he never tires of pointing out, the big three are based in the U.S., and derive substantial revenue from doing business here. Thus he claims that it's only fair that cruise companies should pay income tax.
But Rockefeller isn't content to leave it at that. He also wants to slap a separate 5% gross receipts tax on up to 100% of their top-line revenue. A double whammy.
This tax alone, even before the income tax, would generate hundreds of millions of dollars annually. Rockefeller would earmark it for a proposed "intermodal transportation infrastructure trust fund" that could finance a range of projects from air traffic control to rail transit and even oil pipelines.
An infrastructure fund is a fine idea, but if there is to be an "intermodal" fund, it's only fair that the revenue source be broad-based rather than derived solely from the cruise industry. Ominously missing from Rockefeller's bill is any specific reference to other sources of revenue.
Not a good sign.