MEMPHIS, Tenn. (WMC) - FedEx CEO Fred Smith is fighting back against The New York Times, even challenging the publisher to a debate.
This comes after the Times published a story Sunday detailing how FedEx cut its tax bill to zero.
In a tweet Monday, the New York Times said it stands by its reporting.
The story is also making waves among the 2020 Democratic candidates for president, with Joe Biden, Kamala Harris and Elizabeth Warren all mentioning the article in tweets.
“Some of the democrats, and more Elizabeth Warren than Joe Biden usually, have decided that they are going to go after corporate America. And it’s one thing to do that. It’s another thing to do that on the basis of disputed information,” said Michael Nelson, WMC Action News 5 political analyst.
The Times says it dug through financial filings and discovered that between 2017 and 2018 FedEx managed to cut its tax bill from $1.5 billion to just zero.
The Times says FedEx was able to do this because the company, and Smith in particular, lobbied hard for the Trump tax cut that passed in 2017.
The paper says FedEx has also saved at least $1.6 billion in taxes since that law took effect. The Times used FedEx to highlight how the tax cuts have allowed companies to save millions in taxes, while declaring shareholder dividends and buying back their own stock.
Smith swung back at the Times Sunday releasing a statement calling the story “distorted and factually incorrect.” He also accused the Times of not paying taxes in 2017 and only paying $30 million in 2018.
Smith then challenged the publisher of the Times, A.G. Sulzberger, and the business section editor to a debate. He says the debate should focus on federal tax policy and the societal benefits of business investments to the U.S. economy.
“The story itself was big. It got peoples’ attention. It got Fred Smith’s attention. His response was equally as strong, and I think that has fueled this fire,” said Meagan Nichols, with the Memphis Business Journal. “In a way, it’s smart because we are talking about this theoretical debate versus the numbers they are disputing.”
Nichols said while the article mentions that FedEx pressed the Trump administration for the tax cuts, it fails to point out the increasing tension between the administration and FedEx as of late over the U.S. trade war with China.
“They mention that, of how hard they lobbied the Trump administration,” she said. “But they didn’t also talk about how critical Fred Smith has been of the Trump administration when it comes to the tariff issue. So I think the balance really wasn’t there.”
A FedEx spokesperson said Monday that the company paid federal income tax in 2018 and told the New York Times that. The company said the assertion that they paid no federal income tax in 2018 is inaccurate.
FedEx also released a list of investments the company said it made following the 2017 tax cuts. It includes $200 million in increased compensation for employees, a $1.5 billion contribution to its pension plan, $3 billion in hub expansions and modernizations in Memphis and Indianapolis, and a $6.6 billion purchase of 24 new aircraft.