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Senator says manufacturing giant Caterpillar uses offshore haven to avoid billions in US taxes

Tuesday - 4/1/2014, 1:19pm  ET

WASHINGTON (AP) -- Sen. Carl Levin is blasting Caterpillar Inc., as a member of what he calls the "corporate profit-shifting club" and accusing the manufacturing giant of employing an aggressive tax strategy to avoid paying billions of dollars in U.S. taxes.

Levin opened a Senate hearing on Caterpillar's taxes today by detailing a strategy in which the company avoided paying $2.4 billion in U.S. taxes since 2000 by shifting profits to a wholly-controlled affiliate in Switzerland, even though no employees or business activities were moved there.

The Senate investigations subcommittee spent nine months investigating Caterpillar's taxes. Its report does not accuse the company of breaking the law, but Levin say its tax strategy is not "tolerable."

Caterpillar says it complies with all tax laws and pays what it owes. The company says that works out to an effective income tax rate of 29 percent, among the highest for multinational manufacturers.

Representatives from Caterpillar and its accounting firm PricewaterhouseCoopers LLP are scheduled to testify at today's hearing.

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077-a-11-(Senator Carl Levin, D-Mich., chairman, Senate Permanent Subcommittee on Investigations, at news conference Monday)-"U.S. taxes disappear"-Senate Permanent Subcommittee On Investigations Chairman Senator Carl Levin says Caterpillar used an aggressive tax strategy. (1 Apr 2014)

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078-a-08-(Senator Carl Levin, D-Mich., chairman, Senate Permanent Subcommittee on Investigations, at news conference Monday)-"paying U.S. taxes"-Senate Permanent Subcommittee On Investigations Chairman Senator Carl Levin says Caterpillar shifted profits overseas to limit its tax liability. (1 Apr 2014)

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045-w-35-(Jerry Bodlander, AP correspondent, with Senator Carl Levin, D-Mich., chairman,Senate Permanent Subcommittee on Investigations)--A Senate panel says a major manufacturer avoided billions of dollars in taxes by shifting profits overseas. AP correspondent Jerry Bodlander reports. (1 Apr 2014)

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046-c-23-(Jerry Bodlander, AP correspondent)-"all tax laws"-AP correspondent Jerry Bodlander reports a Senate panel says Caterpillar saved a lot of money by shifting profits overseas. (1 Apr 2014)

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076-a-13-(Senator Carl Levin, D-Mich., chairman, Senate Permanent Subcommittee on Investigations, at news conference Monday)-"dollars and counting"-Senate Permanent Subcommittee On Investigations Chairman Senator Carl Levin says Caterpillar paid $55 million for the tax strategy that saved it billions of dollars. (1 Apr 2014)

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