Target: D. R. Oberhelman, Chief Executive Officer of Caterpillar Inc.
Goal: Call on the company to cease shifting profits overseas to avoid paying billions in taxes to the United States
U.S.-based Caterpillar Inc. is the world’s most successful manufacturer of mining and construction equipment such as bulldozers, backhoes and steamrollers. Sales and revenues for 2013 swelled to nearly $56 billion. Some would call it a classic success story, but Caterpillar has gone to extreme lengths to ensure its prominence. By shifting profits overseas the company has avoided paying $2.4 billion in taxes to the United States since 2000.
Senator Carl Levin, Chairman of the Permanent Subcommittee on Investigations, condemned the tax strategy as one of obvious avoidance. For a corporation to move profits overseas simply to reduce taxes would violate federal law. Company executives defended Caterpillar’s practices at a recent Senate hearing, but the evidence uncovered by Senator Levin shows that Caterpillar intentionally sought to evade taxes. A professional services firm was paid $55 million to develop the strategy, negotiating a special tax rate with Switzerland where the bulk of profits were later shifted. While Caterpillar does business there it went from taxing 85% of profits from its parts business in the U.S. before 1999 to only 15% after implementing the new strategy.
American contracts for its parts distribution business have helped make the company successful. Demand that Caterpillar pay its fair share and cease shifting profits overseas to avoid paying U.S. taxes.
Dear Mr. Oberhelman,
When the Permanent Subcommittee on Investigations recently looked at Caterpillar’s accounting strategies it found a shocking commitment to tax avoidance. Since 2000 the company has evaded $2.4 billion in U.S. taxes by moving the bulk of parts distribution profits to Switzerland. No employees or business activities were relocated there, and consultants were paid handsomely to develop the strategy specifically to reduce the company’s tax burden. This makes it a clear violation of federal law.
Caterpillar has risen to become a world leader in manufacturing heavy equipment. It owes a debt of gratitude to the American economy where it continues to flourish, and to the American people whose individual tax dollars must fill the gap. Schools, roads, law enforcement and other essential services are supported by taxes–not to mention state and federal construction contracts that often utilize your company’s equipment.
It is deeply disappointing to see the extent Caterpillar has gone to in order to avoid its fiscal obligations. I must insist that your company immediately end its evasion of U.S. taxes and begin paying its fair share to support the system that has helped it succeed.
[Your Name Here]
Photo credit: AlfvanBeem via Wikimedia