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The FedEx statement seems like a classic example of corporate deception. It seems very carefully worded, probably by a team of attorneys, to be technically true
by panarky 7y ago
The FedEx statement seems like a classic example of corporate deception. It seems very carefully worded, probably by a team of attorneys, to be technically true but grossly misleading.
The tell is that FedEx calls the NYT article "factually incorrect" but never states exactly what assertions they dispute.
It's as if they want the reader and the media to infer that FedEx actually did pay taxes on billions in profit, or that FedEx actually did increase their investments as the phony rationale for the tax cut promised.
But since FedEx never actually says any of that, and instead just tries to infer it through clever wording, I'm going to trust NYT over this corporate snow job.
When FedEx twists the argument to accuse the NYT of also not increasing their capital investments, the whole thing reeks of Facebook's disinfo campaign to "deny and deflect" fundamentally factual reporting.
- partiallypro 7y ago> The FedEx statement seems like a classic example of corporate deception. This coincidentally also describes the NYTs piece which was also misleading, bordering on activism.
- Someone1234 7y agoIn what way is it "misleading?" Seems like that's just repeating FedEx's unsubstantiated talking points.
- blackrobot 7y agoWhat was misleading about the NYT piece?
- akhosravian 7y agoCan you give some specific examples of things in the NYT piece that are misleading?
- drak0n1c 7y agoThe portrayal of capital investment being essentially zero is claimed to be misleading in the linked article.
- ceejayoz 7y agoThat is not a claim that was made. From the NYT article: > 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. edit: Note: the parent commenter ninja-edited in the word "essentially" after I made this comment.
- drak0n1c 7y agoThat framing is incredibly negative and obviously communicates it as "near zero" to the passing reader. Vague terminology of "less than projected" is the way they choose to frame it in the first sentence, and "spent even less in the next year" is the next sentence. NYT then chooses to completely omit the actual numerical figures of FedEx's investments, and instead highlights figures in the unrelated category of dividend payments (which were actually smaller than recent capital expenditures). I'd say that paragraph you quoted showcases the misleading writing very nicely.
- morsch 7y agoI get _capital investments are going down_ from that. I don't know how you are reading _near zero_ from it. It doesn't get more "passing reader" than me in this case, I know nothing about what happened here and I have zero interest in finding out.
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- snambi 7y agoHey NYTimes is also a corporation. IMHO, NYT cannot hide under journalism, and write fakenews all the time.
- Analemma_ 7y agoYou're about the twentieth person on this thread to insist that the NYT article is "fake news" but not provide any specific assertions about what is wrong.
- megiddo 7y agoAdjusting depreciation schedules are very typical tax strategies for businesses. Hell, I've done this for a one-man shop making less than $100k in a year. Depreciation strategies are an important part of cash-flow management for capital-intensive industries. Otherwise, it's almost impossible to start a factory or other large industrial firm. Cash flow is marginal compared to capital, but the tax rate is proportional to capital. You can easily be put in a situation where the tax burden exceeds the free cash of the business. I guess I'm not clear on what detail you think is missing. To me, their objections and actions are very clearly worded. I believe they pointed out that they regularly pay taxes, that the tax rate for that year was due to accelerating depreciation, and the NYT is engaged in the same accounting strategies. Accelerating depreciation has no net tax benefit over the full depreciation period. If the depreciation period is 10 years, but they accelerate in the first year, their net tax rate is the same over the 10 years as if they did not accelerate. They are simply moving their tax burden to the future. They also took other current expenses to charge their pension, but again, these are expenses that they cannot take in the future - they will pay additional tax on future incomes. The net is the same.
- SpicyLemonZest 7y agoDoes it have no tax benefit assuming constant profits, or no tax benefit no matter what? Can you extract a net benefit by just accelerating some depreciation whenever you have a particularly profitable year?
- aantix 7y agoThank you for pointing out the details. It’s quite clear that some people’s model of taxes comes from doing Turbo Tax, year after year. Even Bernie Sanders does his own taxes. A man that wants to set the tax agenda on multinational corporations. Just because a company pays zero taxes doesn’t mean that there was any thing fraudulent going on. If there’s zero taxes there’s probably incentives, depreciating assets as you described, losses carried forward, the corporate tax cut, employee stock compensation.