WASHINGTON – Sen. Carl Levin is blasting Caterpillar Inc., as a member of what he calls the "corporate profit-shifting club" and accusing the manufacturing giant of employing an aggressive tax strategy to avoid paying billions of dollars in U.S. taxes.
Levin opened a Senate hearing on Caterpillar's taxes today by detailing a strategy in which the company avoided paying $2.4 billion in U.S. taxes since 2000 by shifting profits to a wholly-controlled affiliate in Switzerland, even though no employees or business activities were moved there.
The Senate investigations subcommittee spent nine months investigating Caterpillar's taxes. Its report does not accuse the company of breaking the law, but Levin say its tax strategy is not "tolerable."
Caterpillar says it complies with all tax laws and pays what it owes. The company says that works out to an effective income tax rate of 29 percent, among the highest for multinational manufacturers.
Representatives from Caterpillar and its accounting firm PricewaterhouseCoopers LLP are scheduled to testify at today's hearing.