The chairman and CEO of FedEx is so ticked off about a New York Times story about its $0 tax bill that he issued a scathing rebuttal and challenged the paper’s publisher and business editor to a debate about federal tax policy.
Fred Smith’s comments came yesterday, the day the piece ran on the front page of the country’s premier newspaper.
The story reports that in 2017, the Memphis-based delivery company’s tax bill exceeded $1.5 billion but dropped to zero in 2018 and that the company has been actively lobbying for the president’s tax cuts, which became law. FedEx officials told the paper that the company “paid $2 billion in total federal income taxes over the past 10 years.”
In his statement, Smith called the Times story “distorted and factually incorrect” and invited A.G. Sulzberger and his unnamed business section chief to Washington, D.C., to debate him and FedEx’s corporate vice president of tax. The debate would be about taxes 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,” he said.
The Times was unmoved.
“FedEx’s colorful response does not challenge a single fact in our story. We’re confident in the accuracy of our reporting, which you can read here
,” New York Times
spokeswoman Danielle Rhoades Ha said in an email to Fast Company
. “FedEx’s invitation is clearly a stunt and an effort to distract from the findings of our story.”
The idea behind the tax cuts was, in part, that companies paying less in taxes would spend more on investments, but the Times
found that FedEx
didn’t do so.
The company disagreed with that assessment. It was quoted in the story as saying, “FedEx invested billions in capital items eligible for accelerated depreciation and made large contributions to our employee pension plans . . . 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.”
Smith is a known fan of tax cuts. He’d tried to convince Trump’s predecessor, President Barack Obama, to slash corporate taxes but to no avail.
Smith founded FedEx and built it into the international powerhouse it is today. As part of a response to the Times story, he also attacked the media company’s tax and investment record.
“[T]he 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.”