FedEx blasts NEW tax cut article, challenges publisher to debate
FedEx CEO challenged the publisher of The New York Times to a public debate on tax policy following an article in the paper detailing how the shipping giant effectively owed no fiscal 2018 taxes. The incident came as a result of the Trump Administration's tax evaluation.
The Times story also noted that FedEx did not increase capital spending in fiscal 2018, after CEO Frederick Smith argued that the corporate tax cut would raise further investments.
The Times report sheds light on FedEx as a case study of the impact of President Donald Trump's $ 1[ads1].5 trillion tax cut in 2018, the first year the law came into force.
FedEx financial filings show that the law has so far saved it at least $ 1.6 billion, the Times article states. [19659002] Promises from President Donald Trump and CEOs that the cut would lead to more capital investment and greater economic growth have largely fallen flat, the article claims.
In a state entry posted on the FedEx website, Smith fumed that the Times article was a "factually incorrect story" and a "scandalous distortion of truth" without pointing to specific inaccuracies.
Smith also took the Times to task for his own federal income tax payments, saying that "unlike FedEx, the New York Times paid zero federal income tax in 2017 on revenue of $ 111 million and only $ 30 million in 2018 – 18% of pre-tax book revenues. "
" Also in 2018, the New York Times cut its capital investment nearly to half to $ 57 million, which is a rounding error compared to the $ 6 billion capital FedEx invested in the US economy in during the same year, "Smith added.
Smith then threw a cane.
"I hereby challenge AG Sulzberger, publisher of the New York Times and Editor of the Business Section to a public debate in Washington, DC with me and FedEx Executive Vice President of Taxation," Smith said. "The focus of the debate should be federal tax policy and the relative societal benefits of business investment and the huge intended benefits to the United States economy, especially lower and middle-class workers."
A Times spokesman told CNBC, "FedEx's invitation is clearly a stunt."
She also called it "an attempt to distract from the findings of our story."
Smith had repeatedly argued that the tax cut would lead to "a renaissance of capital investment" right after the cut came into force.
But The Times & # 39; s analysis concluded that FedEx, after receiving about $ 1.6 billion in accumulated tax savings, used most of its cash to buy back shares and dividend increases.
FedEx reportedly spent more than $ 2 billion in buybacks and dividend increases in fiscal year 2019. That was more than twice the buy-back and dividend spend in fiscal year 2017.
Meanwhile, FedEx's capital investment has slumped in recent times two o f financial years. This year, the company also cut employee bonuses.
FedEx is not unique in how it used the tax cut.
Across America, share buybacks have reached $ 806 billion in 2018. Buy-backs this year are not that far behind that collection. However, economic growth increased at a slightly reduced rate of 1.9% last quarter.
