Caterpillar, the global construction equipment manufacturing firm with a plant in Bogart, dodged $2.4 billion in taxes, according to a U.S. Senate report.
The company did it by shifting $8 billion in profits from the U.S. to a Swiss affiliate. Caterpillar negotiated a 4–6 percent tax rate with Switzerland (the usual rate is 8.5 percent).
“In the fantasyland of international tax, Caterpillar waved a magic wand to make billions of dollars in U.S. taxes disappear,” said Sen. Carl Levin (D-MI), who led the investigation. “This is a prime example of a tax avoided strategy that cost the U.S. Treasury billions of dollars.”
Caterpillar paid the accounting firm Pricewaterhousecoopers $55 million to come up with the tax strategy.
Company executives’ response to the report was basically, “Too bad, suckers.”
“I want to emphasize, Caterpillar complies with the U.S. tax laws, and we pay everything we owe,” said Julie Lagacy, vice president of its finance services division.
Sen. Rand Paul (R-KY) called Senate hearings on the subject an “inquisition” and said Caterpillar deserves an award.
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