Firing back at the New York Times, FedEx CEO Frederick Smith claims the newspaper’s parent company paid no federal taxes in 2017 despite earning $111 million. The executive was responding to a Times story on Sunday reporting that the shipping giant had “cut its tax bill to $0” in its last fiscal year and spent the bulk of the tax savings on stock buybacks and dividends rather than investing in the company.
In an unusual move, FedEx said in a news release that the news outlet’s parent, the New York Times Co., last year paid $30 million in total taxes, which FedEx said amounts to 18% of what it calls the media company’s “pre-tax book income.” That’s three percentage points lower than the statutory federal corporate tax rate of 21%, which was lowered in late 2017 under the Republican-backed Tax Cuts and Jobs Act.
Smith also challenged New York Times Publisher A.G. Sulzberger and the paper’s business section editor to a public debate on tax policy.
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In its report, the Times said FedEx paid no federal income tax for its 2018 fiscal year after paying $1.5 billion the year before. The paper attributed the drop to the 2017 tax law change, saying that Smith had personally lobbied for the tax change.
Smith called the story “distorted and factually incorrect,” but did not specify what the news report had gotten wrong.
Danielle Rhoades-Ha, vice president of communications for the New York Times, expressed confidence in the accuracy of the paper’s story. “FedEx’s colorful response does not actually challenge a single fact in our story,” she said in a statement. “FedEx’s invitation is clearly a stunt and an effort to distract from the findings of our story.”
