As Caterpillar prepares to testify at a Senate investigative hearing about its tax practices, the Senate's Permanent Subcommittee on Investigations released a report that says the company diverted profits from a parts buisness to a Swiss subsidiary, allowing Cat to avoid paying $2.4 billion in U.S. taxes, according to Bloomberg. The report was led by Michigan Democrat Sen. Carl Levin.
“Caterpillar takes very seriously its obligation to follow tax law and pay what it owes,” said Julie Lagacy, Caterpillar’s vice president with responsibility for the Finance Services Division in a press release on the company’s website. “In fact, Caterpillar’s effective income tax rate averages about 29 percent, which is one of the highest for a U.S. multinational manufacturing company. Caterpillar’s philosophy is that our business structure drives our tax structure. We comply with the tax laws enacted by Congress, by the states and by all of the many jurisdictions in which we conduct business.”
Lagacy and other Caterpillar executives will testify at today's hearing.