Caterpillar crawls into offshore tax haven to hide profits
1 min read
The dictionary defines a caterpillar as a "wormlike larva" and a "crawler." Also, that "pillar" part of the word is derived from a French verb that means to "pillage, abuse, mistreat."
The dictionary defines a caterpillar as a “wormlike larva” and a “crawler.” Also, that “pillar” part of the word is derived from a French verb that means to “pillage, abuse, mistreat.”
Now, meet Caterpillar Inc., the world’s largest maker of construction and mining machines. A recent report by the Senate subcommittee on investigations found that this wormlike behemoth has crawled through a tax loophole to abuse our public trust.
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Caterpillar has quietly shifted some $8 billion in profits gained from selling parts on the global market into a Swiss subsidiary in order to avoid paying more than two billion dollars in taxes owed to our country. Even though this subsidiary has only 65 employees and neither makes nor sells spare parts, Caterpillar made a slick accounting maneuver that channeled 85 percent of its international parts profits into what amounts to a tax shelter.
Corporate officials tried to bluster their way through a subcommittee hearing, insisting that their offshoring of profits was merely meant to streamline the corporate flow chart. It was “prudent,” said Caterpillar’s top financial officer, “to eliminate the unnecessary middleman” between the profits made on global sales and the paying of taxes on those profits. That’s “absolutely absurd,” said Sen. Levin, the subcommittee chairman. He pointed out that the “middleman” she was referring to is Caterpillar itself! It designed, made, and sold the products – and the only reason it wormed its profits into a Swiss subsidiary was to cheat on the tax bill it legitimately owes in its home country.
When you hear right-wingers say that America doesn’t have the money for infrastructure repairs, poverty programs, etc. – remember that US corporate giants like Caterpillar have hidden some $2 trillion of their profits in slimy offshore wormholes.
“Caterpillar questioned about tax maneuvers,” Austin American Statesman, April 2, 2014.
“At Hearing, Caterpillar Defends Tax Practices,” The New York Times, April 2, 2014.