ICYMI- Rep. Estes Op-Ed: Why the New York Times wanted to kill FedEx’s success story
Why the New York Times wanted to kill the FedEx success story
In the annals of “fake news,” a recent New York Times piece impugning FedEx for allegedly paying no taxes may be Exhibit A. Because my office does not subscribe, I had to borrow a copy. But upon reading, it was clear the story was saturated with bias.
Instead of scolding FedEx and sanctimoniously questioning the company’s corporate citizenship virtues, the Times should be applauding the company, President Trump, and congressional Republicans. By helping to pass the Tax Cut and Jobs Act two years ago, we helped single moms, middle-class families, small businesses, and companies such as FedEx grow and benefit their workers and customers.
The Times’s assertion that FedEx isn’t paying taxes simply isn’t true. FedEx is paying billions in taxes. But their lower tax burden is also enabling the company to make the very kind of investments and capital expenditures we wanted to incentivize when we passed the TCJA and lowered the corporate tax rate from 35% to a globally competitive 21%. As FedEx CEO Frederick W. Smith recently wrote in the Wall Street Journal, “We placed a major order for 24 Boeing wide-body freighters, funded major facility modernizations and expansions, put additional funds in our pension plan, and increased wages by more than $200 million.”
Smith noted that each order of one type of Boeing aircraft (the 777F) “injects about $540 million into the U.S. economy, supports 1,850 jobs, and generates roughly $45 million in federal, state and local taxes.”
As the member of Congress who represents Wichita, Kansas — also known as the “Air Capital of the World” — I have seen the economic implications of these purchases firsthand. After the passage of the TCJA, FedEx, like many companies, consciously adjusted its behavior, investing in its equipment and employees. FedEx helped not only Boeing but other companies such as Wichita’s Spirit AeroSystems and other local aircraft suppliers that benefit from increased aviation purchases. All of these decisions generate new economic activity and new tax revenues for governments at all levels.
Cessna, another Wichita-based aviation company, has also seen expanded growth as a consequence of the tax law. Since the enactment of the Tax Cuts and Jobs Act, deliveries of Cessna Citation jets in 2018 were at their highest since 2009. This increased demand for aviation companies means jobs for a critical industry in my district. It shows that two years after the law was implemented, tax cuts are helping families and businesses thrive.
FedEx’s Smith was rightly apoplectic following the Times story. He challenged Times publisher A.G. Sulzberger to a public debate about “federal tax policy and the relative societal benefits of business investments … to the United States economy, especially lower- and middle-class wage earners.”
FedEx made a point of noting that it has paid almost $10 billion in total taxes in the U.S. during the last five fiscal years, even as the Times “paid zero federal income tax in 2017 on earnings of $111 million, and only $30 million in 2018.”
FedEx also emphasized that the investments it made following the passage of the TCJA included a voluntary contribution of $1.5 billion to the FedEx pension plan and more than $200 million in increased wages, two-thirds of which went to hourly workers.
The Times obviously doesn’t want to admit that the Tax Cut and Jobs Act is working because that would give President Trump and Republicans credit for our current booming economy. Likewise, many Democratic politicians have tried to write off the benefits of the Tax Cuts and Jobs Act. Yet, two years after its enactment, the law continues to fuel growth, investment, and the lowest employment rate in 50 years. This economic growth has also increased middle-class incomes by $5,000 in the last three years, compared to just a $1,200 increase in the previous seven years.
Democrats and the Times may not want to remind Americans (and voters) about the benefits of the Tax Cuts and Jobs Act for fear of losing the next election. But no matter what they think, America’s economy is growing, and families are benefiting. And like FedEx, companies all across the country are finally able to invest in new equipment and their employees for the first in years. This is something we should all celebrate, and the Times should live up to its motto — “All the News That’s Fit to Print.”
Ron Estes has represented Kansas’s 4th Congressional District in the U.S. House of Representatives since 2017. He is a member of the U.S. House Committee on Ways and Means.