How did FedEx get to cut its tax bills?


If you are a business owner, it may seem impossible to pay zero taxes. However, when it comes to FedEx, things are different. Everyone wants to know how they got to cut the tax bills to $0! In this article, you will find out that this has more to do with politics than you would ever imagine.

There is something strange about this, mostly when you notice that in the fiscal year of 2017 FedEx owed more than $1.5 billion in taxes previous to tax cuts. Besides, the company had nothing to pay in the next year after tax cuts, as it was reported by the New York Times. How does someone go from owning so much to owning nothing?


tax bills
How does a company get to cut its tax bills to nothing? Learn some lessons with FedEx! (Source: Pixabay)

From billions to zero in the tax bills

When it comes to FedEx, President Trump’s tax reform has assisted in a considerable manner. However, a small business can not count on the same type of benefit. For the wealthy, banks and other big corporations, Trump’s tax reform package is a lopsided victory because it cuts significantly tax cuts to corporate profits, investment income, and estate tax.

As we previously mentioned, FedEx itself owed about $1.4 billion in taxes. Thus it is no surprise that Frederick Smith, FedEx’s creator and CEO, lobbied continually in favour of the tax reform. When Trump signed the plan into law, the $1.5 trillion tax reduction grew into his signature legislative accomplishment. This is how FedEx’s tax rate decreased from 34% to below zero.

Considering all this, you might be thinking of what motivates the president to forgive tax bills that expressive. In theory, this corporate tax reduction would signify more funds for business to spend on new devices and other improvements. The irony is that, despite the original intent of forgiving the taxes, companies are investing less. That being the case, FedEx’s financial papers demonstrate that the law just helped them save more than $1.5 billion.

The criticism here should come with a caveat: FedEx actually expanded its crew. Besides, it increased payment for employees paid by the hour. According to them, the company invested more than millions in capital features eligible for fast depreciation and gave generous additions to the pension plans of our employee.

If you appreciate or not the tax plan, it is your responsibility as a citizen to investigate if politicians are keeping their promises. It is not fair to see rich companies getting even richer because of any administration if it is not good for all the population. Research, read the news and keep analyzing things. There are elections coming and it is time to reason about political proposals. Even those concerning only tax bills.


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Autor rodmaster

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