The chief executive of Caterpillar Inc said on Tuesday any US policy that does not allow corporations to defer some taxes on foreign income will hurt the economy.
“A big concern about deferral is whether American multinationals can compete in a world where we don’t have deferrals and we do have among highest corporate tax rates in the world,” Jim Owens, CEO of Caterpillar, told a news conference.
If the US designs a tax system that handicaps US multinationals, “it will be to the economy’s long-term detriment,” Owens.
President Barack Obama on Monday vowed to overhaul tax policies that he said reward companies for shifting US jobs overseas and allow the wealthy to evade taxes with offshore accounts.
As part of his plan, he proposes tightening tax-code provisions that allow firms to defer paying taxes on profits they make overseas as long as those earnings are put back into the foreign subsidiaries, a plan opposed by multinational firms like Caterpillar.