Nabor Industries, a large well-drilling and marine-transport company, is trying to play Congress and the American people for suckers. Although Nabor operates out of Houston, it moved its headquarters to a Bermuda mail drop for tax purposes. Thanks to loopholes in American tax law, Nabor was able to cut its U.S. taxes by 80 percent, giving it an unfair advantage over its taxpaying competitors and denying the nation needed revenue at a time of record deficits.
That isn't enough for Nabor. Now, it is lobbying Congress to amend a law (called the Jones Act) that limits shipping between U.S. ports to American companies, ships and crews, the New York Times reported. (International shipping, on the other hand, is dominated by foreign vessels, which enjoy lower labor costs.) Nabor wants to compete for domestic shipping jobs even though it willingly became a foreign company to avoid taxes. It is quietly seeking to change the law so that it (and other foreign companies) could take business away from their American competitors who play by the rules.
One of those, Minor Cheramie Jr., owner of a family shipping business in Louisiana, calls the situation "grossly unfair that we pay taxes for certain services and this big corporation goes foreign and they get the benefit of the same services without paying for them." If it is allowed, Cheramie said, his company would probably have to make a tax move to Bermuda, as well.
It is shameful enough that Congress has not closed the offshore tax loophole, allowing companies that enjoy the nation's bounty to avoid their fair tax responsibility. (Nabor saved $10-million in corporate taxes last year.) Lawmakers should defeat any special-interest amendments that would motivate more companies to follow Nabor's example.
The Jones Act provides some obvious benefits to American shipping companies and to taxpayers. It creates jobs for seamen and ship builders, assures reliable transportation between national ports and requires no government subsidies. There may be some reforms needed to increase competition, as foreign companies claim, but let there be an open debate on the merits of those arguments.
What Nabor is seeking is preferential treatment that would hurt its competitors and American taxpayers.