Caterpillar Inc. avoided paying $2.4 billion in U.S. taxes by shifting profits from a parts business to a subsidiary in Switzerland, according to a report released today by a Senate investigative committee.
The world's largest maker of construction and mining equipment made a "paper change" starting in 1999 that made the profits of the subsidiary subject to a Swiss tax rate as low as 4 percent, said Senator Carl Levin, a Michigan Democrat who will question company executives at a hearing tomorrow.
"Nothing changed in the real world after that except Caterpillar's tax bill," Levin told reporters today. "Caterpillar waved a magic wand to make billions of dollars in U.S. taxes disappear."
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