Caterpillar Avoids $2.4 Billion In Taxes - Rand Paul Approves

Click here for an article in the Louisville, Kentucky, Courier-Journal by Stephen Ohlemacher, Associated Press, entitled "Rand Paul: Award Caterpillar for tax savings," in which Paul congratulates Caterpillar (revenue last year, $56 billion) for its canny business ways:

Caterpillar has avoided paying $2.4 billion in U.S. taxes since 2000 by shifting profits to a wholly-controlled affiliate in Switzerland, according to a report released by Sen. Carl Levin, D-Mich., chairman of the Senate investigations subcommittee.

Paul, R-Ky., questioned why the subcommittee was even holding the hearing. "I think rather than having an inquisition, we should probably bring Caterpillar here and give them an award," Paul said. "You know, they've been in business for over 100 years. It's not easy to stay in business."

Paul said Caterpillar and its accountants have an obligation to shareholders to minimize their taxes. "It is a requirement that you try to minimize your costs," Paul said. "So rather than chastising Caterpillar we should be complimenting them."

According to a report from the committee:

Caterpillar paid PricewaterhouseCoopers LLP $55 million to develop the tax strategy. Under the strategy, Caterpillar transferred the rights to profits from its parts business to a wholly-controlled Swiss affiliate called CSARL, even though no employees or business activities were moved to Switzerland

This is reminiscent of the comments by "Smokey Joe" Barton (R-Texas) at a hearing on the disastrous Deepwater Horizon explosion and spill in the Gulf of Mexico. As reported in a piece on reallyseriously.org:

Rep. Joe Barton (R-Texas), the ranking member of the House Energy and Commerce, said that the relief fund that President Barack Obama had forced the company to create was, in essence, a "slush fund."

“It is a tragedy of the first proportion that a private corporation can be subjected to what I would characterize as a shakedown, in this case a $20 billion dollar shakedown,” Barton said during opening remarks at a hearing today at which BP CEO Tony Hayward will testify.