In late March of this year, the Doug Oberhelman, Chairman and CEO of heavy equipment behemoth Caterpillar Inc, went to town with his “grievances” on the allegedly oppressive business climate in Illinois. It’s a story that’s been widely referenced by Republicans as “proof” that raising taxes kills jobs. In a letter (leaked to the public) to the governor of Illinois, Oberhelman threatened to move Caterpillar out of Illinois. The threat to move out of Illinois received wide publicity through media and financial bloggers and the likely effect was that Caterpillar was seen as a victim.The starting point for this brouhaha was supposedly Illinois temporarily raising its corporate taxes from 4.8% to 7% and temporarily raising personal income taxes from 3% to 5%.
Doug Oberhelman points in the direction of Caterpillar’s offshore illegal tax shelters used to rat-fuck America.
Earlier in January when the Illinois legislature was voting for a tax increase to make up for its deficit, the Caterpillar (CAT) CEO complained in a Chicago Tribune op-ed about the increase in the personal income tax rate -
The personal tax rate at 5.25 percent would mean that more than an additional $40 million would be taken from the paychecks of Caterpillar’s Illinois employees in the first year.This is too much. Such dramatic increases in income taxes will stifle economic growth. The most prudent way to emerge stronger from this budget crisis is to cut state spending rather than only reducing the growth rate of expenditures.
He added that Caterpillar’s corporate taxes in the state also will increase but provided no estimate on the added cost.
Caterpillar does not break out how much it pays in Illinois corporate income taxes, but taxes paid to states within the U.S. represented 4.7 percent of its worldwide tax bill last year, and only 1.2 percent of the company’s worldwide earnings. In 2009, the company had a loss in the U.S. portion of its business and therefore owed no state or federal taxes.
This lack of clarity and not wanting to turn attention towards their corporate taxes may have had something to do with the outing of the “tax fraud” that CAT had been perpetrating for some time.
Bloomberg.com published this on July 8:
Caterpillar Inc. used offshore subsidiaries in Switzerland and Bermuda to avoid about $2 billion in U.S. taxes from 2000 to 2009, boosting its earnings through a “tax and financial statement fraud,” according to a Caterpillar executive’s lawsuit. The company, the world’s largest construction-equipment maker, sold and shipped spare parts globally from an Illinois warehouse while improperly attributing at least $5.6 billion of profits from those sales to a unit in Geneva, according to the suit filed by Daniel J. Schlicksup. He was a global tax strategy manager for Caterpillar from 2005 to 2008.
While there was plenty of media coverage for Oberhelman’s letter to the Illinois governor, coming to the present nobody mentioned the incongruity of that letter when placed in the context of CAT’s “tax fraud” that reduced Illinois revenue. Libertarian financial bloggers like Mike Shedlock had gone all out against the state of Illinois when they got hold of the CAT CEO letter. Shedlock headlined his article as “Poisonous Illinois”. But when CAT’s $2 Billion “tax and financial statement fraud” came out in Bloomberg, Shedlock had nothing to say.
Despite the Bloomberg report, Oberhelman gave this gratuitous commentary during the recent Caterpillar earnings release :
“Lack of clarity on a U.S. deficit reduction plan, trade policy, regulation, much needed tax reform and the absence of a long-term plan to improve the country’s deteriorating infrastructure, do not create an environment that provides our customers with the confidence to invest,” Caterpillar chairman and CEO Doug Oberhelman said in the company’s earnings release Friday.
The real question is this: Why should anyone who isn’t a corrupt scumbag or a brainwashed fool take seriously anything that a crooked tax cheat like Doug Oberhelman says? And yet the Establishment–from the media to Washington politicians in both parties–worships every word uttered by CEOs like Oberhelman as if they’re talking the Gospel, rather than selling us snake-oil.
No wonder nothing’s improving in this country–except for the bank accounts of two-faced tax cheats CEOs like Doug Oberhelman.
Anathapindika is an engineer and lives in Detroit. He can be found wandering around the Michigan central station on most days. He can be contacted at: bhikkhuanathapindika at yahoo dot com.
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