Saturday, September 20, 2014

Tax Dodge: Mitch McConnell's In-Laws Fly Liberian Flags on Their Shipping Fleet

I have no problem in general with businesses or individuals employing tax loopholes to reduce taxes. It was, afterall, Ludwig von Mises who said, “Capitalism breathes through those loopholes.”

That said, it is entirely different story when a crony political family employs loopholes to escape taxes, when they are at the heart of instituting taxes on others.

Curtis Morrison at the Louisville Courant reports that McConnell's in-laws fly Liberian flags on their shipping fleet, to avoid US tax liability.

According to Morrison, McConnell's father-in-law, Captain James S.C. Chao, has fifteen ships in his fleet today and has eight more ships ordered which are expected to be added to his fleet by 2016.

It should be noted, these  ships are larger than World War II aircraft carriers. They are so large they cannot pass through the Suez Canal or Panama Canal (World War II aircraft carriers could). Two of the ships under construction with CSIC are contracted at $55 million each, and two with Nacks are contracted for $58 million each.

Watch this  video to get a sense for how massive these ships are.

Chao is a U.S. citizen , but his ships fly Liberian flags. By flying Liberian flags, Chao avoids paying U.S. taxes.

Get a load of this:

Tradewinds notes, "Shanghai-born Chao and is said to have close links with both the US and Chinese governments."  Morrison comments:
That would certainly explain the appearance of his name on the White House guest list the night in 2011 that President Barack Obama was entertaining the then-General Secretary of the Central Committee of the Communist Party of China Hu Jintao.
But if you're thinking Chao received a father-in-law discount for those close links, think again. Since 1990, over $300,000 in political contributions from Foremost Group employees have flowed to candidates campaigns for federal office, like McConnell for Senate, and campaign committees like the Kentucky Republican Party. And those are just the contributions we know about.

 Here's a clip of McConnell's wife,who is a former U.S. Secretary of Labor, Elaine Chao at the October 12, 2011 signing ceremony for the Liberian flagged Lan May. She is the one in the light blue suit.


1 comment:

  1. Since the United States Navy does not provide protection for the US merchant fleet (its original mission) there is no reason for any shipping company to flag a ship in a jurisdiction that will tax all profits from anywhere in the world. The fees smaller countries get from shippers reduces their whine for the largesse of the US Treasury in the form of aid.