This is what globalization means for corporate America ...
Caterpillar has its home offices and headquarters in Peoria, Illinois. Domestic sales accounted for almost 40 percent of total global sales (p. 10) in the last quarter of 2013. While international sales accounted for a little over 60 percent of Caterpillar's global sales they were able to book 85 percent of their profits in Switzerland in spite of not having a single factory in the country.
Over the years this arrangement has allowed Caterpillar to dump $2.4 billion in U.S. tax obligations.
While Caterpillar claims that they do their best to be good corporate citizens their actions suggest otherwise. In 1999 they paid an accounting firm $55 million to help them develop a tax strategy that would shift company profits to a wholly owned subsidiary in Switzerland. Where Caterpillar once located 85 percent of their profits in the U.S. they now locate 85 percent of their profits in Switzerland.
This strategy now saves them about $300 million a year in taxes.
Today the United States is home to 54 Caterpillar manufacturing facilities, the bulk of Caterpillars R&D centers, and 10 of its warehouses for parts. For their part, Switzerland employs a grand total of 65 of Caterpillar's workers, which accounts for a paltry 0.0005 percent of Caterpillars global workforce (133,354).
Finding tax havens to avoid paying U.S. tax obligations - in the process dumping the shortfall on you and me - is just one aspect of what globalization means to corporate America.
- Mark
Hat tip to Tom for the original Caterpillar link.
Caterpillar has its home offices and headquarters in Peoria, Illinois. Domestic sales accounted for almost 40 percent of total global sales (p. 10) in the last quarter of 2013. While international sales accounted for a little over 60 percent of Caterpillar's global sales they were able to book 85 percent of their profits in Switzerland in spite of not having a single factory in the country.
Over the years this arrangement has allowed Caterpillar to dump $2.4 billion in U.S. tax obligations.
This strategy now saves them about $300 million a year in taxes.
Today the United States is home to 54 Caterpillar manufacturing facilities, the bulk of Caterpillars R&D centers, and 10 of its warehouses for parts. For their part, Switzerland employs a grand total of 65 of Caterpillar's workers, which accounts for a paltry 0.0005 percent of Caterpillars global workforce (133,354).
Finding tax havens to avoid paying U.S. tax obligations - in the process dumping the shortfall on you and me - is just one aspect of what globalization means to corporate America.
- Mark
Hat tip to Tom for the original Caterpillar link.
No comments:
Post a Comment