FedEx Won't Have Any Trouble Paying Their PGA Tour Bills After Tax Code Change Reduced 2018 Tax Bill To "Less Than Zero"

The New York Times’ Jim Tankersley, Peter Eavis and Ben Casselman explain how FedEx lobbied successfully for corporate tax cuts that effectively lowered their tax bill from a hefty $1.5. billion in 2017 to “less than zero” in 2018.

In other words, if you were wondering how they could justify that big FedExCup boost in prize money, not to worry!

As for capital investments, the company spent less in the 2018 fiscal year than it had projected in December 2017, before the tax law passed. It spent even less in 2019. Much of its savings have gone to reward shareholders: FedEx spent more than $2 billion on stock buybacks and dividend increases in the 2019 fiscal year, up from $1.6 billion in 2018, and more than double the amount the company spent on buybacks and dividends in fiscal year 2017.

A spokesman said it was unfair to judge the effect of the tax cuts on investment by looking at year-to-year changes in the company’s capital spending plans.

“FedEx invested billions in capital items eligible for accelerated depreciation and made large contributions to our employee pension plans,” the company said in a statement. “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.”

And that they did on the PGA Tour!