Caterpillar Inc. of Peoria has jumped to the forefront of manufacturing companies complaining about the cost of the federal health care overhaul. On March 18 the company sent a letter to Speaker Nancy Pelosi and Representative John A. Boehner, the Republican leader, saying mandated changes would cost it “$100 million in the first year alone.”
According to a regulatory filing by the company last week, the $100 million figure is Caterpillar’s estimated total cost for as long as the newly enacted Patient Protection and Affordable Care Act remains in effect. And the $100 million charge is an accounting change, a noncash cost that has no affect on the company’s operations.
In addition, the $100 million figure does not arise from changes to decades-long practices at Caterpillar. Rather, it comes about because the new law removes a tax break codified in 2003.
No company sneezes at the elimination of a $100 million tax break. But in 2008, Caterpillar had $51 billion in sales, and profits topped $3.5 billion for the third straight year. The projected profits for 2010 are a relatively weak $1.56 billion, and the $100 million tax charge would mean an additional 6 percent reduction.
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So really Caterpillar’s complaint boils down to whining about a removal of a tax break enacted when Republicans controlled the Congress and the White House. Cry me a river…Footnotes:
- 2010 contributions- 24% to Democrats, 76% to Republicans, 2004 contributions -11% to Democrats, 89% to Republicans [↩]