Re: Company, Foreign at Tax Time, Seeks Americans-Only Work
New York Times
A big oil-well drilling company that has used one law to escape American taxes by taking addresses in Bermuda and Barbados is now trying to use another law to qualify for business open only to American companies.
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The debate comes as official reports show that corporate tax revenues are plummeting because of a weaker economy and tax shelters, with the Congressional Budget Office estimating it will raise $136 billion this year, down from $207 billion just three years ago.
Nabors Industries is the nation's largest operator of oil-well drilling rigs and has its working headquarters in Houston. But since late 2001 the company has used a Bermuda maildrop as its tax headquarters and a Barbados office as its legal headquarters.
There is no corporate income tax in Bermuda and under a treaty with Barbados, profits are taxed at 1 percent. The United States corporate tax rate is 35 percent. The savings to Nabors was $10 million last year.
Now Nabors wants to qualify fully for business under the Jones Act, which since 1916 has required that ships engaged in purely domestic trade be built in American shipyards, owned by American companies and operated by American crews. Nabors owns 33 ships serving oil drilling platforms, a tenth of the fleet of about 350 ships that ferry supplies like drill pipe in the Gulf of Mexico.
Nabors argues that its American subsidiary qualifies it for business under the Jones Act, and that under a 1996 law that allows foreign financing of such ships, its Bermuda parent is simply providing the money for these ships.
What do you think about American companies who move offshore to avoid paying US income taxes (much less a company like Nabors who wants to compete for business that by law is to be done by "all-" American companies)?
The problem is with the law in US, not the companies. OVERTAXATION ! eliminate totally the income taxes and then you will see a huge boom in the economy and spending - of course, with an increase of the sales tax for the entire US....but this takes guts, and this is an election year....