The New York Times published what appeared to be a bombshell Sunday, but the subject of its story fought back with an uncomfortable truth about the publication’s own tax bills.
The Times’ story, “How FedEx Cut Its Tax Bill to $0,” weaves a worrying tale of lobbyists, President Donald Trump’s tax cuts and the supposed greed of corporate America.
Hinting that Trump’s massive tax cut was the result of lobbying efforts, the article laments the “windfall” FedEx and other companies are allegedly reaping.
“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,” read the article by The Times’ Jim Tankersley, Peter Eavis and Ben Casselman.
“Nearly three dozen, including FedEx, saw their tax rates fall to zero or reported that tax authorities owed them money,” they later added.
The Times’ take on tax reform doesn’t appear to have hit the bullseye, however.
FedEx responded with a statement appearing to give some context to the publication’s “deliberate distortion” of the company’s financials.
“FedEx has paid federal income tax every year, including fiscal year 2018,” the company’s statement read. “Following passage of the Tax Cuts and Jobs Act (TCJA), FedEx invested billions in capital items eligible for accelerated depreciation and made large contributions to our employee pension plans.”
The statement details exactly where FedEx’s investments have been going, and it looks like a win for workers and American industry.
Along with bolstering employees’ pension plans in the face of a crumbling Social Security system, the company used its newly freed funds to increase compensation for employees, most for those paid by the hour.
Over $3 billion is slated to go toward a six-year improvement project of the shipping giant’s Memphis, Tennessee, and Indianapolis hubs.
The company also said it supported tax increases in some cases, putting a giant question mark on The Times’ story of corporate greed. According to the statement, FedEx backed taxes on fuel in an effort to combat deteriorating infrastructure.
Frederick Smith, the CEO of FedEx, issued a scorching response himself, bringing The Times’ own tax bill into the conversation.
“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,” Smith said in a statement.
“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.”
Smith wasn’t content with humbling The Times for its relatively nonexistent contribution to the economy and threw down the gauntlet to those in charge.
“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 said.
If The Times wanted a chance to defend its reporting and point of view, this was it — the focus of the debate would be federal tax policy.
Unfortunately, the publication doesn’t appear interested.
In a statement to The Washington Post, Danielle Rhoades Ha, The Times’ vice president of communications, dismissed Smith’s debate challenge as a “stunt.”
“FedEx’s colorful response does not actually challenge a single fact in our story,” Rhoades Ha said. “We’re confident in the accuracy of our reporting.”
No comments:
Post a Comment