> In the 2017 fiscal year, FedEx owed more than $1.5 billion in taxes. The next year, it owed nothing.
> Its financial filings show it owed no taxes in the 2018 fiscal year overall. Company officials said FedEx paid $2 billion in total federal income taxes over the past 10 years.
So in the last 10 years FedEx paid $2B in taxes, of which $1.5B was paid in 2017. That seems really weird. Does anyone know enough about their financials to explain how this happened?
I'm assuming the $2B is about payroll taxes, their share of federal income tax for W2 employees. All companies with these type of employees pay some of these (along with SS and workman's comp, etc.)
There is another question of corporate taxes. Corporate taxes work different than individual taxes. For individuals we: EARN > PAY TAKES > SPEND. However, for corporations they: EARN > SPEND > PAY TAXES. This means that all companies can choose to pay no corporate taxes ever. This is purposeful and the intent of the tax code is to encourage reinvestment and expansion and capital expenditures like new equipment because this keeps more people employed long term. This is always why people don't understand when company X paid $0 in corporate taxes. It is a choice. It should be expected from someone like Amazon who re-invests so heavily.
Now if a company wants to have cash on hand or do stock buybacks, they they must realize this money and pay taxes on it. The new tax laws made this a much much more attractive proposition. The "promise" was that this would be spent on expansion however most was spent on stock buybacks which is a large driver of the stock market up in the last year despite interest rates around zero and rapidly slowing growth. It seems to me that this is the jist of the NYT article. The $0 is just to grab headlines. Lots of companies lobbied for these cuts for "expansion" but none of them did. They took the opportunity to leverage it against stock price which makes sense for the C suite since that is a major part of their compensation. This is another reason that board members, C suite and VPs of public companies should not be paid in stocks or options or RSUs.
http://s1.q4cdn.com/714383399/files/doc_financials/annual/20...