Caterpillar Avoided $2.4 Billion in US Taxes

Caterpillar, the “world’s largest maker of construction and mining equipment,” avoided $2.4 billion in US corporate taxes by diverting $8 billion in profit through a Swiss affiliate. (The Guardian)

Senator Carl Levin’s Senate Committee is investigating US Transnational corporations for hiding US taxes abroad. Levin said that while no business operations changed Caterpillar, “waved a magic wand to make millions of dollars in US taxes disappear.”

Thank goodness for The Guardian newspaper of Britain. They are reporting this story.

The US corporate tax rate on paper is 29 percent. The Swiss corporate tax rate is 4 percent.

Caterpillar paid $55 million to an accounting firm to figure out and implement this massive scheme of fraud and tax evasion.

While the US corporate tax rate is 29 percent, it is shot so full of loopholes, few US based corporations payroll that much. In, fact the hugely profitable US based oil and energy companies pay no corporate taxes, for example.

Levin is sponsoring legislation to force US Transnationals to account for profits laundered through their overseas affiliates.

Photo source: Nicolas Raymond on Flickr (CC BY 3.0 US)