New York Times Accuses FedEx Of Not Paying Taxes. FedEx’s Response Is Priceless.

[Achilles]

New York Times Accuses FedEx Of Not Paying Taxes. FedEx’s Response Is Priceless.

By Ryan Saavedra
DailyWire.com

Scott Olson/Getty Images

The New York Times accused FedEx on Sunday of essentially having lobbied President Donald Trump to sign tax cuts into law with the promise of businesses using the saved money to reinvest in and further grow their companies, and then failing to invest the billions of dollars that it reportedly saved as a result of the tax cuts.

“In the 2017 fiscal year, FedEx owed more than $1.5 billion in taxes. The next year, it owed nothing. What changed was the Trump administration’s tax cut – for which the company had lobbied hard,” The New York Times reported on Sunday. “The public face of its lobbying effort, which included a tax proposal of its own, was FedEx’s founder and chief executive, Frederick Smith, who repeatedly took to the airwaves to champion the power of tax cuts.”

New York Times Accuses FedEx Of Not Paying Taxes. FedEx’s Response Is Priceless.

Four months later, President Trump signed into law the $1.5 trillion tax cut that became his signature legislative achievement. FedEx reaped big savings, bringing its effective tax rate from 34 percent in fiscal year 2017 to less than zero in fiscal year 2018, meaning that, overall, the government technically owed it money. But it did not increase investment in new equipment and other assets in the fiscal year that followed, as Mr. Smith said businesses like his would,” the Times added. “Nearly two years after the tax law passed, the windfall to corporations like FedEx is becoming clear. A New York Times analysis of data compiled by Capital IQ shows no statistically meaningful relationship between the size of the tax cut that companies and industries received and the investments they made.”

Late on Sunday, FedEx CEO Frederick Smith responded to The New York Times’ story by calling it factually incorrect, claiming that The New York Times is the company that does not pay federal income taxes, and challenging the publisher of The New York Times to a debate on tax policy.

“The New York Times published a distorted and factually incorrect story on the front page of the Sunday, November 17 edition concerning FedEx and our billions of dollars of tax payments and billions of dollars of investments in the U.S. economy,” Smith wrote. “Pertinent to this outrageous distortion of the truth is the fact that unlike FedEx, the New York Times paid zero federal income tax in 2017 on earnings of $111 million, and only $30 million in 2018 – 18% of their pretax book income. Also in 2018 the New York Times cut their capital investments nearly in half to $57 million, which equates to a rounding error when compared to the $6 billion of capital that FedEx invested in the U.S. economy during that same year.”

“I hereby challenge A.G. Sulzberger, publisher of the New York Times and the business section editor to a public debate in Washington, DC with me and the FedEx corporate vice president of tax,” Smith continued. “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, especially lower and middle class wage earners.”

Smith concluded, “I look forward to promptly hearing from Mr. Sulzberger and scheduling this open event to bring further public awareness of the facts related to these important issues.”

https://www.dailywire.com/news/new-y...-is-priceless/

[pc-not]

Priceless. I would go further with FedEx's argument. The NYT has damaged not only the economy, but the entire American culture by their lies in support of the globalist agenda. Their continual output of fake news and anti-Trump propaganda has enabled real enemies of freedom to become emboldened.

[Green Man]

A great example of howaboutism.

At least the OP dosn't dispute accuracy of the headline.

How FedEx Cut Its Tax Bill to $0

https://www.nytimes.com/2019/11/17/b...sultPosition=1

[jimmyb]

A great example of howaboutism.

At least the OP dosn't dispute accuracy of the headline.

How FedEx Cut Its Tax Bill to $0

https://www.nytimes.com/2019/11/17/b...sultPosition=1

Since I won't pay to view this can you summarize it for me...My understanding was they invested back into the company which should create jobs.Is that incorrect..

[Green Man]

How FedEx Cut Its Tax Bill to $0


The company, like much of corporate America, has not made good on its promised investment surge from President Trump’s 2017 tax cuts.

By Jim Tankersley, Peter Eavis and Ben Casselman


WASHINGTON — In the 2017 fiscal year, FedEx owed more than $1.5 billion in taxes. The next year, it owed nothing. What changed was the Trump administration’s tax cut — for which the company had lobbied hard.

The public face of its lobbying effort, which included a tax proposal of its own, was FedEx’s founder and chief executive, Frederick Smith, who repeatedly took to the airwaves to champion the power of tax cuts. “If you make the United States a better place to invest, there is no question in my mind that we would see a renaissance of capital investment,” he said on an August 2017 radio show hosted by Larry Kudlow, who is now chairman of the National Economic Council.

Four months later, President Trump signed into law the $1.5 trillion tax cut that became his signature legislative achievement. FedExreaped big savings, bringing its effective tax rate from 34 percentin fiscal year 2017 to less than zero in fiscal year 2018, meaning that, overall, the government technically owed it money. But it did not increase investment in new equipment and other assets in the fiscal year that followed, as Mr. Smith said businesses like his would.

Nearly two years after the tax law passed, the windfall to corporations like FedEx is becoming clear. A New York Times analysis of data compiled by Capital IQ shows no statistically meaningful relationship between the size of the tax cut that companies and industries received and the investments they made. If anything, the companies that received the biggest tax cuts increased their capital investment by less, on average, than companies that got smaller cuts.

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.

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.”

FedEx’s use of its tax savings is representative of corporate America. Companies have already saved upward of $100 billion more on their taxes than analysts predicted when the law was passed. Companies that make up the S&P 500 index had an average effective tax rate of 18.1 percent in 2018, down from 25.9 percent in 2016, according to an analysis of securities filings. More than 200 of those companies saw their effective tax rates fall by 10 points or more. Nearly three dozen, including FedEx, saw their tax rates fall to zero or reported that tax authorities owed them money.


From the first quarter of 2018, when the law fully took effect, companies have spent nearly three times as much on additional dividends and stock buybacks, which boost a company’s stock price and market value, than on increased investment.

The law cut the corporate rate to 21 percent from 35 percent, and allowed companies to deduct the full cost of new equipment investments in the year that they make them. Those cuts stimulated the American economy in 2018, helping to push economic growth to 2.5 percent for the year and fueling a boost in hiring. Business investment rose at an 8.8 percent rate in the first quarter of 2018, and was nearly as strong in the second quarter.

But the impact dwindled quickly.

In the summer, the economy grew at just 1.9 percent and business investment fell 3 percent, including a 15.3 percent plunge in spending on factories and offices. Over the spring, companies spent less on new investments, after adjusting for inflation, than they had in the winter.

Overall business investment during Mr. Trump’s tenure has now grown more slowly since the tax cuts were passed than before.

Some conservative economists and business leaders say the effects of the tax cuts were undercut by uncertainty from Mr. Trump’s trade war, which is slowing global growth and prompting companies to freeze projects. Other economists say the fizzle is predictable because high tax rates were not holding back investment.

“It did provide a short-term boost, but it wasn’t the big response that many people expected,” said Aparna Mathur, an economist at the conservative American Enterprise Institute, who recently concluded that the 2017 law has not meaningfully changed investment patterns in America.



Listen to ‘The Daily’: A Broken Promise On Taxes

FedEx pledged investment in exchange for a tax cut. We look at what the company has done with a tax bill of $0 — and billions back in its pocket.


TRANSCRIPT

Listen to ‘The Daily’: A Broken Promise On Taxes

Hosted by Michael Barbaro; produced by Rachel Quester and Jonathan Wolfe; with help from Neena Pathak; and edited by Lisa Chow

FedEx pledged investment in exchange for a tax cut. We look at what the company has done with a tax bill of $0 — and billions back in its pocket.


Michael BarbaroFrom The New York Times, I’m Michael Barbaro. This is “The Daily.”

Today: As they lobbied the Trump administration for a $1.5 trillion tax cut, corporations promised that they would invest the savings right back into the U.S. economy. Jim Tankersley investigates whether that actually happened.
It’s Tuesday, November 19.

Archived Recording (Donald Trump)To all Americans, I say it’s time for change and time for leadership. Just think about what we can accomplish in the first 100 days of a Trump administration. We’re going to have the biggest tax cut since Ronald Reagan, even —

Jim TankersleyThroughout the 2016 presidential campaign, Donald Trump had promised he was going to cut taxes.
Archived Recording (Donald Trump)We are proposing major tax relief for the middle class and lowering the business tax from 35 percent all the way down to 15 percent.

Jim TankersleyBig tax cuts for individuals, and especially for businesses, which he said was going to revitalize the American economy as a big part of his economic program.

Archived Recording (Donald Trump)And you will see companies expand, companies come back into our country, companies not leave our country anymore because taxes and regulations are so onerous.

Jim TankersleyIt’s one of his top priorities. He gets into office. His team starts working on it. But it’s not what they do first in Congress.

Michsel BarbaroMm-hmm.
Archived Recording (Donald Trump)

Finally, we want a very big tax cut, but cannot do that until we keep our promise to repeal and replace the disaster known as Obamacare.

Jim TankersleyWhat they try to do first is repeal Obamacare.

Archived RecordingThis morning, Republicans are fighting to pass a new health care plan. Right now, House Republicans just don’t have enough votes to pass the replacement to Obamacare.
Jim TankersleyAnd in the spring of 2017, that effort is not going well, and neither is Trump’s tax plan.

[Music]Michael BarbaroWhy not?
Jim TankersleyWell, the version of the tax bill that Republicans are working on has some big opponents in the business community. And there’s a real question over whether they can actually craft a bill that passes muster with enough folks in Congress, and with the business community, and makes it all the way to President Trump’s desk, and he’ll sign it.
Michael BarbaroRight. I remember this feeling like a perilous moment for this young presidency. It’s struggling to repeal the Affordable Care Act, and it is struggling to convince people to support its tax cuts.

Jim TankersleyRight.

Archived Recording 1There is a lot of discord within the Republican Party as to what works when it comes to tax reform and when it comes to health care.
Archived Recording 2Six months into his term, he has exactly zero big legislative accomplishments to boast about.

Jim TankersleyIf there’s one thing you would have expected a Republican president with Republican majorities to be able to do, it’s pass a big tax cut.
Michael BarbaroMm-hmm.

Jim TankersleyAnd yeah, we’re at this moment in the spring when that looks like that might not happen. And into the breach of that steps Fred Smith.

Michael BarbaroAnd who is Fred Smith?
Jim TankersleyFred Smith is a former Marine who went to Yale and wrote a famous paper in a class that imagines a new type of company that is so wild in its imagination that he gets a C on the paper.

Michael Barbaro[LAUGHS]
Jim TankersleyBut he turns around and takes the basis of what he has sketched out on the paper into a company, and builds it into FedEx —

Archived RecordingAmerica, you’ve got a new airline. There’s no first class, no meals, no movies — in fact, no passengers, just packages.
Jim Tankersley— this enormous, multinational shipping conglomerate and delivery company.

Archived RecordingFederal Express, a whole new airline of packages only.
Michael BarbaroAnd how exactly does the founder of FedEx, Fred Smith, get involved in this?

Jim TankersleyWell, he has been an advocate for lower corporate tax rates for a really long time. And now he sees this opportunity with President Trump, a real ally of corporate tax cuts in the White House, to push this plan he’s been working on for years. And he does something more than just push the idea of tax cuts into the public discourse. He and his team at FedEx actually write their own plan —

Michael Barbaro Wow.
Jim Tankersley— their own tax proposal.
Michael BarbaroAnd what’s in this Fred Smith plan?

Jim TankersleyThe FedEx plan is really centered around a big cut in the corporate tax rate, from 35 percent to 20 percent, and some extra carrots for businesses to be able to write new investments off their taxes right away, so two things that Fred Smith and a lot of other executives say are going to spur a renaissance of business investment in America.

Archived Recording (Frederick Smith)The fundamental problem with the U.S. tax code is that it punishes investment.

Jim TankersleyThe argument is that the United States was being held back in its economy by a lack of business investment —

Archived Recording (Frederick Smith)And at the end of the day, investment is what produces high-paying jobs.

Jim Tankersley— that companies just weren’t spending money that they were sitting on, basically, and they weren’t spending it on capital spending that economists see as very important to economic growth.

Archived Recording (Frederick Smith)If you make the United States a better place to invest, there is no question in my mind that we would see a renaissance of capital investment, a growth in G.D.P. and an increase in an income for our blue-collar workforce in the United States.

Michael BarbaroWhat kind of investments is Fred Smith talking about? When we talk about capital investments, what do we mean?

Jim TankersleyWe’re talking about plants. We’re talking about equipment. In FedEx’s case, we’re talking about airplanes or a transportation hub or new technologies that can help to deliver or sort packages faster. So something that can help you make your business run more efficiently — that’s the kind of thing that economists think of as big, productive capital investments.

Michael BarbaroGot it. And the reason that would help the rest of the economy is someone has to build that plant, someone has to build that plane. It just ripples across.

Jim Tankersley It ripples across for a couple of reasons. One, it creates demand for those products that are being invested in, which, yes, need to be built, and need to be installed or flown or whatever. But the other real argument is that having these new technologies put in place helps workers do more.

Archived Recording (Frederick Smith)

Investment is the only way to make blue-collar workers, people that don’t have college degrees, more productive and have more income. So you can hire six people to move a pile of dirt, or you can hire one person with a bulldozer. The difference is the bulldozer. The bulldozer driver makes a lot more money than the people with the shovels.

Jim TankersleyAnd the argument was that companies weren’t doing that because their profits were taxed too heavily. And it was more profitable for them to invest in other countries than in the United States because America’s tax rates weren’t competitive.

Archived Recording (Frederick Smith)It’s just like us playing basketball. And on our end of the court we’re playing with a 12-foot basket, and everybody else that we compete with around the world is shooting on a 10-foot basket.

Jim TankersleyFred Smith makes this very clear promise, saying, if we cut corporate tax rates, businesses are going to start investing again in America, and the economy is going to grow faster. And that’s going to help workers and everyone.

Michael Barbaro Jim, how skeptical are people of the Fred Smith school of thinking here, that big corporate tax cuts will lead to big investments in the economy and to a lot of growth in the U.S.?

Jim Tankersley Well, a huge part of Washington is not skeptical at all. They are pushing this. The Trump administration, Republicans in Congress, many sort of economists who support tax reform are arguing to one degree or another that there will be more investment, lots more, if you just cut the corporate tax rate. There is, though, this dissenting group, including a lot of Democrats and liberal economists, who make the argument that, hey, companies have a lot of money. They don’t need lower taxes to have just a little bit more money to invest it. If they want to invest it, they can. It’s sitting right there on their balance sheets. And cutting their taxes is not going to dramatically increase investment because that’s not what’s holding them back.

Michael Barbaro And I’m curious, Jim, how much was FedEx paying in corporate taxes at the time that Fred Smith was making this argument?

Jim Tankersley So throughout the time that he’s making this argument, FedEx is paying what it calls in its financial filings an effective tax rate of about 33 percent or 34 percent, which is a lot. In just the fiscal year 2017 alone, it paid more than $1.5 billion in taxes.

Michael Barbaro So that’s a meaningful tax bill.

Jim TankersleyIt’s a meaningful tax bill. And it’s close to the top corporate tax rate in America, which is 35 percent before the Trump tax cuts passed.
Michael BarbaroSo what happens to the Fred Smith tax plan?

Jim TankersleyThe tax plan arrives in Washington and gets a warm reception, and it injects energy in what had been a little bit of a stalled process.
[Music]Archived RecordingBrightening prospects of a major tax cut, especially for corporations.

Jim TankersleyAnd it helps open the door again for all of the champions of tax reform to work together for a new bill.
Archived Recording (Donald Trump)And as a Christmas gift to all of our hardworking families, we hope Congress will pass massive tax cuts for the American people.

Jim TankersleySo Republicans get back on track on the tax bill, particularly spurred on by the fact that they fail completely to repeal the Affordable Care Act. So now this is it. The business community is back on board, they’re lobbying hard. The Trump administration is working key details out with congressional negotiators.

Archived RecordingPresident Trump is heading to Capitol Hill today to boost momentum for the tax reform bill that could become his first legislative victory.
Jim TankersleyWe enter the fall. The House passes a version of the bill.
Archived RecordingDebate is still happening on the Senate floor. But this bill does appear to be gaining momentum.

Jim TankersleyThe Senate narrowly passes a version of the bill, with no Democrats supporting it. And then they put them together, and the final proposal includes the really big corporate rate cut. Basically, just like what Fred Smith and FedEx have proposed.

Michael BarbaroMm-hmm.
Jim TankersleyAnd it includes a bunch of other incentives for investment, also like FedEx had proposed.

Michael BarbaroAnd then, of course, the bill passes.

Jim TankersleyThe bill passes. I do vaguely recall in my fever dreams from that time period of working 20-hour days that the bill did pass.

Michael Barbaro[LAUGHS]

Jim Tankersley And the president did sign it into law.

Archived Recording (Donald Trump)The corporate tax rate, as you know, will be lowered from 35 percent to 21 percent. That means that more products will be made in the U.S.A. A lot of things are going to be happening in the U.S.A.

We’re going to bring back our companies. They’ve already started coming back. I think they had a certain confidence in me. They figured we were going to get this done.

Jim TankersleyThis law includes individual tax cuts. It includes some other provisions. But the centerpiece, the thing it was sold on, was the idea that it would reinvigorate economic growth in America.

And it would do that by supercharging business investment. It’s almost hard to understate just how often and vocally Republicans and the president made that case to voters, that this is what American business and the American economy needed for more domestic investment.
Michael BarbaroSo once this bill passes, what is FedEx’s tax bill? How much does it save?

Jim TankersleySo the bill passes. And FedEx files financial statements for the fiscal year 2018 at the end of the year. And it shows that rather than paying $1.5 billion, like it paid the last year, it actually was owed money by the government. It has a negative effective tax rate.
Michael BarbaroWhat?

Jim TankersleyYeah, negative 5 percent.
Michael BarbaroSo less than zero.

Jim TankersleyLess than zero.

Michael BarbaroWow. And how much of that savings, $1.5 plus billion, is attributable to this tax bill?
Jim TankersleyAll of it. Over the first two years after the tax law, we can count $1.6 billion.

Michael BarbaroHmm. So that’s a pretty staggering figure. But then again, we know that FedEx plans to use that money to reinvest in the American economy.
Jim TankersleySo that’s the story that FedEx told before the law passed.
[Music]But the story that played out is different.

Michael BarbaroWe’ll be right back.
So Jim, what happened with all this money that FedEx saved from this tax cut that it played such a huge role in shaping?

Jim TankersleyFedEx had said, up to the eve of the bill being signed, that they were going to use the money to increase investment. But they didn’t. Investment actually went down compared to what they had projected. And then the next year, it went down again.

Michael BarbaroHmm. So what did FedEx do with these savings if they were not investing it in the kind of things that we all thought they would?

Jim TankersleyWell, it largely rewarded its shareholders. It increased dividends, which is the money it regularly pays people who own its stock. And it bought back shares of that stock, which has the effect of pushing up prices of the stock for the people who own it. Now, to be clear, it did some good things for its workers, too. It accelerated some raises. It increased the size of its workforce. It made a large contribution to its pension plan. But the big winner were shareholders. And that’s a group that is largely, if you look at who owns stock in America, skewed toward the very wealthy.

Michael BarbaroSo the promise that FedEx made, that they would invest much of the savings from this tax cut into the kind of projects that would benefit everyday workers across the economy — instead, the benefit of the way they used this money really went to people who are largely already pretty well-off.

Jim TankersleyIn the short term, that seems very clear.

Michael BarbaroWhy do you think that FedEx did that?

Jim TankersleyI had a lot of questions for FedEx about how they spent their tax money. I tried to ask some of the executives over a period of a couple months. I was never granted an interview with an executive. I sent very detailed questions, including one very similar to the one you just asked. Most of them went unanswered. I would love to hear FedEx’s explanation of how it has made the decisions it’s made with its tax cut windfall.

Michael BarbaroHmm. Jim, how typical was this for companies that received these big savings from the tax cuts, that they did not use it to invest, and instead they used it to buy back shares or pay dividends?

Jim TankersleyIt was very typical. My colleagues and I did a few different analyses to sort of demonstrate just how widespread this type of behavior was. And here’s a few ways of looking at it. One is that companies increased share buybacks and dividends by about triple as much as they increased investment following the tax cuts.

Michael BarbaroWow.

Jim TankersleyAnother is that investment has now grown more slowly since the tax cuts under President Trump than it grew before the tax cuts under President Trump.

Michael BarbaroWhich is another way of saying that the central claim of the tax cuts, and how they would be used, and how it would benefit the economy, that has just not come to pass.

Jim TankersleyIt is not.

Michael BarbaroJim, if these companies were to call you back, and you were able to ask what their thinking was, would there be an argument from a company like FedEx about why the way it chose to use this money is wise and will benefit the American economy?

Jim TankersleyAbsolutely. The argument goes like this. First off, rewarding shareholders is just another way to increase investment. Because those shareholders will use that money to invest in different companies, who will use that money productively. The other argument is that it’s just too soon to tell the effects of tax cuts on investment, that basically what changes for companies when you cut their tax rate is not, oh, they get a bunch of money today. It’s that investments tomorrow pay off even more. Because the profits you get back, you pay less taxes on. And so we would expect over time to see more investment, not right away.

Michael BarbaroIs there any truth to that? Are these arguments from the companies about how they use this money accurate, that it eventually will really help the economy?
Jim TankersleyI think there are mechanical truths that you can see to those arguments. But it’s also true that this is all really complicated, and that this was sold as a very simple relationship. Cut the taxes, investment will increase. And just the fact that we’re not seeing that happen right away flies in the face of the arguments that were used to sell the bill. I think that’s really important here, is that, yes, it may be true that investment over time is slightly more competitive in America because of a reduction in marginal business tax rates. But that was not what President Trump stood up at rallies and talked about. He talked about growing the American economy by 3, 4, 5, 6 percent a year because of all this flood of investment coming back to the United States. And we just don’t see it.
Michael BarbaroJim, why is this important, at the end of the day? I mean, these companies successfully lobbied for a tax cut. They got it. It’s their money. Theoretically, can’t they just do what they want to do with it, whatever that is?

Jim TankersleyI think it’s important to hold politicians and their supporters accountable for the promises they make, particularly when those promises have real-world implications. The economy is not performing as well as we were promised it would when the tax cuts were passed. It’s not growing as fast. It doesn’t have as much investment. And if you believe the arguments that were made to sell this, that’s hurting workers. Because slower growth is keeping their incomes from rising as fast as they should be. So real people are suffering from not having that additional growth that they were promised they would have and now don’t. A then there’s this one last thing, which is this all comes at a cost. It’s not free to just give money back to corporations by cutting their tax bills. Despite what the proponents said, which was that the law would pay for itself — the additional growth — what we’re actually seeing is a massive, hundreds-of-billions-of-dollars-a-year effect to grow the federal budget deficit. And last year, that deficit came very close to topping $1 trillion.

Michael BarbaroAnd how big a role is the tax cut playing in that ballooning deficit?
Jim TankersleyIt is the primary driver of additional deficits beyond what we had already before the law was passed.
[Music]Michael BarbaroJim, thank you very much.

Jim TankersleyThank you.

Michael BarbaroIn a statement, FedEx criticized the Times reporting about its tax savings and investments, but offered no specific factual objections. In the statement, the company’s founder and C.E.O., Fred Smith, challenged the publisher of The Times to a public debate about federal tax policy in Washington. In response, a spokeswoman for The Times dismissed the request as a stunt and a, quote, “effort to distract from the findings of our story.”
....

Mr. Smith, 75, a former Marine who built FedEx from a small package delivery service into a global logistics giant, was no stranger to pressing for lower taxes. He tried, without success, to get President Barack Obama to cut the corporate rate. But with Mr. Trump’s ascension, the corporate chief began a one-man campaign to convince Washington that now was the moment. He met with the president-elect at Trump Tower on Nov. 17, just days after the election, and appeared alongside the president at official events.
In a conference call with analysts the month after Mr. Trump’s election, Alan Graf, FedEx’s chief financial officer, called the prospect of a 20 percent corporate tax rate “a mighty fine Christmas gift.”

Mr. Smith teamed up with his competitor, David Abney, the chairman and chief executive of UPS, to push for a tax overhaul, including jointly writing an op-ed in The Wall Street Journal.

“Fred and I even jointly had some meetings about this with key people, and we were both pushing pretty hard,” Mr. Abney said in a recent interview.


Mr. Smith met with Mr. Trump and Vice President Mike Pence in February 2017, and on May 26 he spoke on the phone with Steven Mnuchin, the Treasury secretary, according to Mr. Mnuchin’s public calendar.

Eight months after Congress passed the law, Mr. Trump celebrated the tax cuts by hosting Mr. Smith and other business leaders at a dinner at his Bedminster, N.J., golf club. He singled out Mr. Smith several times, bantering with him about a term paper that Mr. Smith had written while a student at Yale. The paper formed the basis for the creation of FedEx.

The next week, Mr. Smith boasted of his company’s influence on the law in the company’s annual report, which noted that FedEx is “investing more than $4.2 billion in our people and our network as a result of the tax act.”

FedEx increased the size of its work force by around 4 percent in its 2018 fiscal year and around 7 percent in its 2019 fiscal year.

The company also accelerated previously scheduled wage increases for hourly employees by six months. It gave performance-based pay to other managers and said it would invest $1.5 billion over seven years in its Indianapolis shipping hub. The company also bought 24 Boeing freight jets for $6.6 billion, a purchase officials say would not have happened without tax cuts.



This year, the company cut back employee bonuses and has offered buyouts in an effort to reduce labor costs in the face of slowing global growth. The company has also added to its pension fund, a move that carried the benefit of reducing its tax liability even further.

FedEx reduced its tax liability in part by taking advantage of a provision in the law that allowed companies to immediately deduct the value of any capital investments they make in a given year. But its biggest gains were from the cut in the corporate rate. FedEx had been carrying a large amount of future tax liabilities on its balance sheet — and when the corporate rate fell to 21 percent, those liabilities shrank too.

“Something like $1.5 billion in future taxes that they had promised to pay, just vanished,” said Matthew Gardner, an analyst at the liberal Institute on Taxation and Economic Policy in Washington. “The obvious question is whether you can draw any line, any connection between the tax breaks they’re getting, ostensibly designed to encourage capital expenditures, and what they’re actually doing. And it’s just impossible to know.”

[Hoppalong]

Well good for Fedex, and great comeback to those naysayers and distorted reporting as well. LOL

[PatDaly]

How FedEx Cut Its Tax Bill to $0


The company, like much of corporate America, has not made good on its promised investment surge from President Trump’s 2017 tax cuts.

By Jim Tankersley, Peter Eavis and Ben Casselman


WASHINGTON — In the 2017 fiscal year, FedEx owed more than $1.5 billion in taxes. The next year, it owed nothing. What changed was the Trump administration’s tax cut — for which the company had lobbied hard.

The public face of its lobbying effort, which included a tax proposal of its own, was FedEx’s founder and chief executive, Frederick Smith, who repeatedly took to the airwaves to champion the power of tax cuts. “If you make the United States a better place to invest, there is no question in my mind that we would see a renaissance of capital investment,” he said on an August 2017 radio show hosted by Larry Kudlow, who is now chairman of the National Economic Council.

Four months later, President Trump signed into law the $1.5 trillion tax cut that became his signature legislative achievement. FedExreaped big savings, bringing its effective tax rate from 34 percentin fiscal year 2017 to less than zero in fiscal year 2018, meaning that, overall, the government technically owed it money. But it did not increase investment in new equipment and other assets in the fiscal year that followed, as Mr. Smith said businesses like his would.

Nearly two years after the tax law passed, the windfall to corporations like FedEx is becoming clear. A New York Times analysis of data compiled by Capital IQ shows no statistically meaningful relationship between the size of the tax cut that companies and industries received and the investments they made. If anything, the companies that received the biggest tax cuts increased their capital investment by less, on average, than companies that got smaller cuts.

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.

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.”

FedEx’s use of its tax savings is representative of corporate America. Companies have already saved upward of $100 billion more on their taxes than analysts predicted when the law was passed. Companies that make up the S&P 500 index had an average effective tax rate of 18.1 percent in 2018, down from 25.9 percent in 2016, according to an analysis of securities filings. More than 200 of those companies saw their effective tax rates fall by 10 points or more. Nearly three dozen, including FedEx, saw their tax rates fall to zero or reported that tax authorities owed them money.


From the first quarter of 2018, when the law fully took effect, companies have spent nearly three times as much on additional dividends and stock buybacks, which boost a company’s stock price and market value, than on increased investment.

The law cut the corporate rate to 21 percent from 35 percent, and allowed companies to deduct the full cost of new equipment investments in the year that they make them. Those cuts stimulated the American economy in 2018, helping to push economic growth to 2.5 percent for the year and fueling a boost in hiring. Business investment rose at an 8.8 percent rate in the first quarter of 2018, and was nearly as strong in the second quarter.

But the impact dwindled quickly.

In the summer, the economy grew at just 1.9 percent and business investment fell 3 percent, including a 15.3 percent plunge in spending on factories and offices. Over the spring, companies spent less on new investments, after adjusting for inflation, than they had in the winter.

Overall business investment during Mr. Trump’s tenure has now grown more slowly since the tax cuts were passed than before.

Some conservative economists and business leaders say the effects of the tax cuts were undercut by uncertainty from Mr. Trump’s trade war, which is slowing global growth and prompting companies to freeze projects. Other economists say the fizzle is predictable because high tax rates were not holding back investment.

“It did provide a short-term boost, but it wasn’t the big response that many people expected,” said Aparna Mathur, an economist at the conservative American Enterprise Institute, who recently concluded that the 2017 law has not meaningfully changed investment patterns in America.



Listen to ‘The Daily’: A Broken Promise On Taxes

FedEx pledged investment in exchange for a tax cut. We look at what the company has done with a tax bill of $0 — and billions back in its pocket.


TRANSCRIPT

Listen to ‘The Daily’: A Broken Promise On Taxes

Hosted by Michael Barbaro; produced by Rachel Quester and Jonathan Wolfe; with help from Neena Pathak; and edited by Lisa Chow

FedEx pledged investment in exchange for a tax cut. We look at what the company has done with a tax bill of $0 — and billions back in its pocket.


Michael BarbaroFrom The New York Times, I’m Michael Barbaro. This is “The Daily.”

Today: As they lobbied the Trump administration for a $1.5 trillion tax cut, corporations promised that they would invest the savings right back into the U.S. economy. Jim Tankersley investigates whether that actually happened.
It’s Tuesday, November 19.

Archived Recording (Donald Trump)To all Americans, I say it’s time for change and time for leadership. Just think about what we can accomplish in the first 100 days of a Trump administration. We’re going to have the biggest tax cut since Ronald Reagan, even —

Jim TankersleyThroughout the 2016 presidential campaign, Donald Trump had promised he was going to cut taxes.
Archived Recording (Donald Trump)We are proposing major tax relief for the middle class and lowering the business tax from 35 percent all the way down to 15 percent.

Jim TankersleyBig tax cuts for individuals, and especially for businesses, which he said was going to revitalize the American economy as a big part of his economic program.

Archived Recording (Donald Trump)And you will see companies expand, companies come back into our country, companies not leave our country anymore because taxes and regulations are so onerous.

Jim TankersleyIt’s one of his top priorities. He gets into office. His team starts working on it. But it’s not what they do first in Congress.

Michsel BarbaroMm-hmm.
Archived Recording (Donald Trump)

Finally, we want a very big tax cut, but cannot do that until we keep our promise to repeal and replace the disaster known as Obamacare.

Jim TankersleyWhat they try to do first is repeal Obamacare.

Archived RecordingThis morning, Republicans are fighting to pass a new health care plan. Right now, House Republicans just don’t have enough votes to pass the replacement to Obamacare.
Jim TankersleyAnd in the spring of 2017, that effort is not going well, and neither is Trump’s tax plan.

[Music]Michael BarbaroWhy not?
Jim TankersleyWell, the version of the tax bill that Republicans are working on has some big opponents in the business community. And there’s a real question over whether they can actually craft a bill that passes muster with enough folks in Congress, and with the business community, and makes it all the way to President Trump’s desk, and he’ll sign it.
Michael BarbaroRight. I remember this feeling like a perilous moment for this young presidency. It’s struggling to repeal the Affordable Care Act, and it is struggling to convince people to support its tax cuts.

Jim TankersleyRight.

Archived Recording 1There is a lot of discord within the Republican Party as to what works when it comes to tax reform and when it comes to health care.
Archived Recording 2Six months into his term, he has exactly zero big legislative accomplishments to boast about.

Jim TankersleyIf there’s one thing you would have expected a Republican president with Republican majorities to be able to do, it’s pass a big tax cut.
Michael BarbaroMm-hmm.

Jim TankersleyAnd yeah, we’re at this moment in the spring when that looks like that might not happen. And into the breach of that steps Fred Smith.

Michael BarbaroAnd who is Fred Smith?
Jim TankersleyFred Smith is a former Marine who went to Yale and wrote a famous paper in a class that imagines a new type of company that is so wild in its imagination that he gets a C on the paper.

Michael Barbaro[LAUGHS]
Jim TankersleyBut he turns around and takes the basis of what he has sketched out on the paper into a company, and builds it into FedEx —

Archived RecordingAmerica, you’ve got a new airline. There’s no first class, no meals, no movies — in fact, no passengers, just packages.
Jim Tankersley— this enormous, multinational shipping conglomerate and delivery company.

Archived RecordingFederal Express, a whole new airline of packages only.
Michael BarbaroAnd how exactly does the founder of FedEx, Fred Smith, get involved in this?

Jim TankersleyWell, he has been an advocate for lower corporate tax rates for a really long time. And now he sees this opportunity with President Trump, a real ally of corporate tax cuts in the White House, to push this plan he’s been working on for years. And he does something more than just push the idea of tax cuts into the public discourse. He and his team at FedEx actually write their own plan —

Michael Barbaro Wow.
Jim Tankersley— their own tax proposal.
Michael BarbaroAnd what’s in this Fred Smith plan?

Jim TankersleyThe FedEx plan is really centered around a big cut in the corporate tax rate, from 35 percent to 20 percent, and some extra carrots for businesses to be able to write new investments off their taxes right away, so two things that Fred Smith and a lot of other executives say are going to spur a renaissance of business investment in America.

Archived Recording (Frederick Smith)The fundamental problem with the U.S. tax code is that it punishes investment.

Jim TankersleyThe argument is that the United States was being held back in its economy by a lack of business investment —

Archived Recording (Frederick Smith)And at the end of the day, investment is what produces high-paying jobs.

Jim Tankersley— that companies just weren’t spending money that they were sitting on, basically, and they weren’t spending it on capital spending that economists see as very important to economic growth.

Archived Recording (Frederick Smith)If you make the United States a better place to invest, there is no question in my mind that we would see a renaissance of capital investment, a growth in G.D.P. and an increase in an income for our blue-collar workforce in the United States.

Michael BarbaroWhat kind of investments is Fred Smith talking about? When we talk about capital investments, what do we mean?

Jim TankersleyWe’re talking about plants. We’re talking about equipment. In FedEx’s case, we’re talking about airplanes or a transportation hub or new technologies that can help to deliver or sort packages faster. So something that can help you make your business run more efficiently — that’s the kind of thing that economists think of as big, productive capital investments.

Michael BarbaroGot it. And the reason that would help the rest of the economy is someone has to build that plant, someone has to build that plane. It just ripples across.

Jim Tankersley It ripples across for a couple of reasons. One, it creates demand for those products that are being invested in, which, yes, need to be built, and need to be installed or flown or whatever. But the other real argument is that having these new technologies put in place helps workers do more.

Archived Recording (Frederick Smith)

Investment is the only way to make blue-collar workers, people that don’t have college degrees, more productive and have more income. So you can hire six people to move a pile of dirt, or you can hire one person with a bulldozer. The difference is the bulldozer. The bulldozer driver makes a lot more money than the people with the shovels.

Jim TankersleyAnd the argument was that companies weren’t doing that because their profits were taxed too heavily. And it was more profitable for them to invest in other countries than in the United States because America’s tax rates weren’t competitive.

Archived Recording (Frederick Smith)It’s just like us playing basketball. And on our end of the court we’re playing with a 12-foot basket, and everybody else that we compete with around the world is shooting on a 10-foot basket.

Jim TankersleyFred Smith makes this very clear promise, saying, if we cut corporate tax rates, businesses are going to start investing again in America, and the economy is going to grow faster. And that’s going to help workers and everyone.

Michael Barbaro Jim, how skeptical are people of the Fred Smith school of thinking here, that big corporate tax cuts will lead to big investments in the economy and to a lot of growth in the U.S.?

Jim Tankersley Well, a huge part of Washington is not skeptical at all. They are pushing this. The Trump administration, Republicans in Congress, many sort of economists who support tax reform are arguing to one degree or another that there will be more investment, lots more, if you just cut the corporate tax rate. There is, though, this dissenting group, including a lot of Democrats and liberal economists, who make the argument that, hey, companies have a lot of money. They don’t need lower taxes to have just a little bit more money to invest it. If they want to invest it, they can. It’s sitting right there on their balance sheets. And cutting their taxes is not going to dramatically increase investment because that’s not what’s holding them back.

Michael Barbaro And I’m curious, Jim, how much was FedEx paying in corporate taxes at the time that Fred Smith was making this argument?

Jim Tankersley So throughout the time that he’s making this argument, FedEx is paying what it calls in its financial filings an effective tax rate of about 33 percent or 34 percent, which is a lot. In just the fiscal year 2017 alone, it paid more than $1.5 billion in taxes.

Michael Barbaro So that’s a meaningful tax bill.

Jim TankersleyIt’s a meaningful tax bill. And it’s close to the top corporate tax rate in America, which is 35 percent before the Trump tax cuts passed.
Michael BarbaroSo what happens to the Fred Smith tax plan?

Jim TankersleyThe tax plan arrives in Washington and gets a warm reception, and it injects energy in what had been a little bit of a stalled process.
[Music]Archived RecordingBrightening prospects of a major tax cut, especially for corporations.

Jim TankersleyAnd it helps open the door again for all of the champions of tax reform to work together for a new bill.
Archived Recording (Donald Trump)And as a Christmas gift to all of our hardworking families, we hope Congress will pass massive tax cuts for the American people.

Jim TankersleySo Republicans get back on track on the tax bill, particularly spurred on by the fact that they fail completely to repeal the Affordable Care Act. So now this is it. The business community is back on board, they’re lobbying hard. The Trump administration is working key details out with congressional negotiators.

Archived RecordingPresident Trump is heading to Capitol Hill today to boost momentum for the tax reform bill that could become his first legislative victory.
Jim TankersleyWe enter the fall. The House passes a version of the bill.
Archived RecordingDebate is still happening on the Senate floor. But this bill does appear to be gaining momentum.

Jim TankersleyThe Senate narrowly passes a version of the bill, with no Democrats supporting it. And then they put them together, and the final proposal includes the really big corporate rate cut. Basically, just like what Fred Smith and FedEx have proposed.

Michael BarbaroMm-hmm.
Jim TankersleyAnd it includes a bunch of other incentives for investment, also like FedEx had proposed.

Michael BarbaroAnd then, of course, the bill passes.

Jim TankersleyThe bill passes. I do vaguely recall in my fever dreams from that time period of working 20-hour days that the bill did pass.

Michael Barbaro[LAUGHS]

Jim Tankersley And the president did sign it into law.

Archived Recording (Donald Trump)The corporate tax rate, as you know, will be lowered from 35 percent to 21 percent. That means that more products will be made in the U.S.A. A lot of things are going to be happening in the U.S.A.

We’re going to bring back our companies. They’ve already started coming back. I think they had a certain confidence in me. They figured we were going to get this done.

Jim TankersleyThis law includes individual tax cuts. It includes some other provisions. But the centerpiece, the thing it was sold on, was the idea that it would reinvigorate economic growth in America.

And it would do that by supercharging business investment. It’s almost hard to understate just how often and vocally Republicans and the president made that case to voters, that this is what American business and the American economy needed for more domestic investment.
Michael BarbaroSo once this bill passes, what is FedEx’s tax bill? How much does it save?

Jim TankersleySo the bill passes. And FedEx files financial statements for the fiscal year 2018 at the end of the year. And it shows that rather than paying $1.5 billion, like it paid the last year, it actually was owed money by the government. It has a negative effective tax rate.
Michael BarbaroWhat?

Jim TankersleyYeah, negative 5 percent.
Michael BarbaroSo less than zero.

Jim TankersleyLess than zero.

Michael BarbaroWow. And how much of that savings, $1.5 plus billion, is attributable to this tax bill?
Jim TankersleyAll of it. Over the first two years after the tax law, we can count $1.6 billion.

Michael BarbaroHmm. So that’s a pretty staggering figure. But then again, we know that FedEx plans to use that money to reinvest in the American economy.
Jim TankersleySo that’s the story that FedEx told before the law passed.
[Music]But the story that played out is different.

Michael BarbaroWe’ll be right back.
So Jim, what happened with all this money that FedEx saved from this tax cut that it played such a huge role in shaping?

Jim TankersleyFedEx had said, up to the eve of the bill being signed, that they were going to use the money to increase investment. But they didn’t. Investment actually went down compared to what they had projected. And then the next year, it went down again.

Michael BarbaroHmm. So what did FedEx do with these savings if they were not investing it in the kind of things that we all thought they would?

Jim TankersleyWell, it largely rewarded its shareholders. It increased dividends, which is the money it regularly pays people who own its stock. And it bought back shares of that stock, which has the effect of pushing up prices of the stock for the people who own it. Now, to be clear, it did some good things for its workers, too. It accelerated some raises. It increased the size of its workforce. It made a large contribution to its pension plan. But the big winner were shareholders. And that’s a group that is largely, if you look at who owns stock in America, skewed toward the very wealthy.

Michael BarbaroSo the promise that FedEx made, that they would invest much of the savings from this tax cut into the kind of projects that would benefit everyday workers across the economy — instead, the benefit of the way they used this money really went to people who are largely already pretty well-off.

Jim TankersleyIn the short term, that seems very clear.

Michael BarbaroWhy do you think that FedEx did that?

Jim TankersleyI had a lot of questions for FedEx about how they spent their tax money. I tried to ask some of the executives over a period of a couple months. I was never granted an interview with an executive. I sent very detailed questions, including one very similar to the one you just asked. Most of them went unanswered. I would love to hear FedEx’s explanation of how it has made the decisions it’s made with its tax cut windfall.

Michael BarbaroHmm. Jim, how typical was this for companies that received these big savings from the tax cuts, that they did not use it to invest, and instead they used it to buy back shares or pay dividends?

Jim TankersleyIt was very typical. My colleagues and I did a few different analyses to sort of demonstrate just how widespread this type of behavior was. And here’s a few ways of looking at it. One is that companies increased share buybacks and dividends by about triple as much as they increased investment following the tax cuts.

Michael BarbaroWow.

Jim TankersleyAnother is that investment has now grown more slowly since the tax cuts under President Trump than it grew before the tax cuts under President Trump.

Michael BarbaroWhich is another way of saying that the central claim of the tax cuts, and how they would be used, and how it would benefit the economy, that has just not come to pass.

Jim TankersleyIt is not.

Michael BarbaroJim, if these companies were to call you back, and you were able to ask what their thinking was, would there be an argument from a company like FedEx about why the way it chose to use this money is wise and will benefit the American economy?

Jim TankersleyAbsolutely. The argument goes like this. First off, rewarding shareholders is just another way to increase investment. Because those shareholders will use that money to invest in different companies, who will use that money productively. The other argument is that it’s just too soon to tell the effects of tax cuts on investment, that basically what changes for companies when you cut their tax rate is not, oh, they get a bunch of money today. It’s that investments tomorrow pay off even more. Because the profits you get back, you pay less taxes on. And so we would expect over time to see more investment, not right away.

Michael BarbaroIs there any truth to that? Are these arguments from the companies about how they use this money accurate, that it eventually will really help the economy?
Jim TankersleyI think there are mechanical truths that you can see to those arguments. But it’s also true that this is all really complicated, and that this was sold as a very simple relationship. Cut the taxes, investment will increase. And just the fact that we’re not seeing that happen right away flies in the face of the arguments that were used to sell the bill. I think that’s really important here, is that, yes, it may be true that investment over time is slightly more competitive in America because of a reduction in marginal business tax rates. But that was not what President Trump stood up at rallies and talked about. He talked about growing the American economy by 3, 4, 5, 6 percent a year because of all this flood of investment coming back to the United States. And we just don’t see it.
Michael BarbaroJim, why is this important, at the end of the day? I mean, these companies successfully lobbied for a tax cut. They got it. It’s their money. Theoretically, can’t they just do what they want to do with it, whatever that is?

Jim TankersleyI think it’s important to hold politicians and their supporters accountable for the promises they make, particularly when those promises have real-world implications. The economy is not performing as well as we were promised it would when the tax cuts were passed. It’s not growing as fast. It doesn’t have as much investment. And if you believe the arguments that were made to sell this, that’s hurting workers. Because slower growth is keeping their incomes from rising as fast as they should be. So real people are suffering from not having that additional growth that they were promised they would have and now don’t. A then there’s this one last thing, which is this all comes at a cost. It’s not free to just give money back to corporations by cutting their tax bills. Despite what the proponents said, which was that the law would pay for itself — the additional growth — what we’re actually seeing is a massive, hundreds-of-billions-of-dollars-a-year effect to grow the federal budget deficit. And last year, that deficit came very close to topping $1 trillion.

Michael BarbaroAnd how big a role is the tax cut playing in that ballooning deficit?
Jim TankersleyIt is the primary driver of additional deficits beyond what we had already before the law was passed.
[Music]Michael BarbaroJim, thank you very much.

Jim TankersleyThank you.

Michael BarbaroIn a statement, FedEx criticized the Times reporting about its tax savings and investments, but offered no specific factual objections. In the statement, the company’s founder and C.E.O., Fred Smith, challenged the publisher of The Times to a public debate about federal tax policy in Washington. In response, a spokeswoman for The Times dismissed the request as a stunt and a, quote, “effort to distract from the findings of our story.”
....

Mr. Smith, 75, a former Marine who built FedEx from a small package delivery service into a global logistics giant, was no stranger to pressing for lower taxes. He tried, without success, to get President Barack Obama to cut the corporate rate. But with Mr. Trump’s ascension, the corporate chief began a one-man campaign to convince Washington that now was the moment. He met with the president-elect at Trump Tower on Nov. 17, just days after the election, and appeared alongside the president at official events.
In a conference call with analysts the month after Mr. Trump’s election, Alan Graf, FedEx’s chief financial officer, called the prospect of a 20 percent corporate tax rate “a mighty fine Christmas gift.”

Mr. Smith teamed up with his competitor, David Abney, the chairman and chief executive of UPS, to push for a tax overhaul, including jointly writing an op-ed in The Wall Street Journal.

“Fred and I even jointly had some meetings about this with key people, and we were both pushing pretty hard,” Mr. Abney said in a recent interview.


Mr. Smith met with Mr. Trump and Vice President Mike Pence in February 2017, and on May 26 he spoke on the phone with Steven Mnuchin, the Treasury secretary, according to Mr. Mnuchin’s public calendar.

Eight months after Congress passed the law, Mr. Trump celebrated the tax cuts by hosting Mr. Smith and other business leaders at a dinner at his Bedminster, N.J., golf club. He singled out Mr. Smith several times, bantering with him about a term paper that Mr. Smith had written while a student at Yale. The paper formed the basis for the creation of FedEx.

The next week, Mr. Smith boasted of his company’s influence on the law in the company’s annual report, which noted that FedEx is “investing more than $4.2 billion in our people and our network as a result of the tax act.”

FedEx increased the size of its work force by around 4 percent in its 2018 fiscal year and around 7 percent in its 2019 fiscal year.

The company also accelerated previously scheduled wage increases for hourly employees by six months. It gave performance-based pay to other managers and said it would invest $1.5 billion over seven years in its Indianapolis shipping hub. The company also bought 24 Boeing freight jets for $6.6 billion, a purchase officials say would not have happened without tax cuts.



This year, the company cut back employee bonuses and has offered buyouts in an effort to reduce labor costs in the face of slowing global growth. The company has also added to its pension fund, a move that carried the benefit of reducing its tax liability even further.

FedEx reduced its tax liability in part by taking advantage of a provision in the law that allowed companies to immediately deduct the value of any capital investments they make in a given year. But its biggest gains were from the cut in the corporate rate. FedEx had been carrying a large amount of future tax liabilities on its balance sheet — and when the corporate rate fell to 21 percent, those liabilities shrank too.

“Something like $1.5 billion in future taxes that they had promised to pay, just vanished,” said Matthew Gardner, an analyst at the liberal Institute on Taxation and Economic Policy in Washington. “The obvious question is whether you can draw any line, any connection between the tax breaks they’re getting, ostensibly designed to encourage capital expenditures, and what they’re actually doing. And it’s just impossible to know.”

So just repeat the false information, don't try and refute the fact that FedEx plopped 6 Billion in capital expenditures?

Good Democrat, good!

[Green Man]

The poiint is that it was not false information. The NYT benefited tremendously from the corporate tax cuts, as did FX.

[merovingian]

The NYT benefited tremendously from the corporate tax cuts, as did FX.

Wasn't that the fedex point in the OP?
Pot calling the kettle black, a favorite socialist ploy. The envycrats can't see it.

[Davy Crockett]

Green Man, are you saying there was something illegal or wrong with Fedex not paying taxes?

It would be their duty to take all allowable deductions.

Do you pay more than you have to?