“The focus of the debate should be federal tax policy and the relative societal benefits of business investments and the enormous intended benefits to the United States economy.”
On Sunday, The New York Times had an article about how FedEx managed to cut its tax bill to only $0.
FedEx CEO Frederick Smith released a statement, claiming the paper “published a distorted and factually incorrect piece” on his company.
Smith also challenged the NYT editor to a public debate on federal tax policy.
The NYT article asserted that FedEx, like most big businesses, “has not made good on its promised investment surge from President Trump’s 2017 tax cuts.”
The authors wrote:
FedEx’s financial filings show that the law has so far saved it at least $1.6 billion. Its financial filings show it owed no taxes in the 2018 fiscal year overall. Company officials said FedEx paid $2 billion in total federal income taxes over the past 10 years.
As for capital investments, the company spent less in the 2018 fiscal year than it had projected in December 2017, before the tax law passed. It spent even less in 2019. Much of its savings have gone to reward shareholders: FedEx spent more than $2 billion on stock buybacks and dividend increases in the 2019 fiscal year, up from $1.6 billion in 2018, and more than double the amount the company spent on buybacks and dividends in fiscal year 2017.
The company released this statement:
A spokesman said it was unfair to judge the effect of the tax cuts on investment by looking at year-to-year changes in the company’s capital spending plans.
“FedEx invested billions in capital items eligible for accelerated depreciation and made large contributions to our employee pension plans,” the company said in a statement. “These factors have temporarily lowered our federal income tax, which was the law’s intention to help grow G.D.P., create jobs and increase wages.”
CEO Smith released this scathing statement:
Following this @nytimes piece, the chief executive of FedEx is challenging the editor of the Times and its business section editor to a *public debate* on taxes. https://t.co/cyfrncoLED pic.twitter.com/ZAnr1QMlYq
— Steve Kopack (@SteveKopack) November 18, 2019
You know what? If FedEx had a $0 tax bill I say good for them. The money the company made belongs to the company, not the federal government.
The tax cuts gave the CEOs an opportunity to invest in parts of the company that would have been neglected if the company did not save that tax money. Why invest in parts that do not need the money? Is there something wrong with a company saving the money so it is on hand when a part of the company needs it?
Why do people act like this is a bad thing? Back in April, NBC News published a piece from The Center for Public Integrity that claimed twice as many companies have paid zero taxes due to the tax cuts.
It’s not just FedEx. The Institute on Taxation and Economic Policy found that “60 Fortune 500 companies avoided paying all federal income tax in 2018.”
Again, SO WHAT? Good for them.
Also, big companies have used loopholes within the tax code to pay a small amount in taxes.
I know the media published reports in 2010 about GE’s $0 tax bill. I don’t remember the outrage, though.
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