A recent Boll Moyers program guest was Nobel prize winner Joseph Stiglitz. He was talking about the American tax code and a recent study by the American Association for Tax Fairness. The report argued that for many larger American companies, the corporate tax rate has never been lower. That's due of course to the incredibly unfair and easily manipulated tax code that congress is unwilling to fix (lobbyist pressure at work anyone?). As part of the story, it was noted that our good friends, FDX, have paid ZERO federal taxes for the last 3 years due in large part to their plane upgrades which have been effectively subsidized by the tax payer and the federal government. Add to that the tax benefits derived from their staffing cutbacks and, wow- can you believe it- no need to be hassled by an old American tradition like paying taxes. I mention this because as I recall, UPS is usually in the 35-36% tax rate. DOES ANYONE KNOW OUR EXACT RATE OF TAX? So, FDX cheats all domestic governments across this country by operating an independent contractor model that is blatantly abusive to tax collection and, while Fred Jerk-off garners constant accolades for being the model of the American dream businessman- fails to pay federal income taxes as well? Somebody do a hit piece on him?fdx and his anti-American approach to business, please?
This argument is almost as old as FDX. As an X-UPSer I'm just jealous of their corporate set up, just like we're not happy with Postal ability to not pay taxes or parking tickets in he cities, big advantage. All my UPS low hanging fruit is now gone. Only verrry low cost basis stock left, and that would be the very last sale I would make and only under duress. Hope to leave it to the kids/grandkids. Maybe that put me in the same boat as FDX by legally avoiding that cap gain tax ? Just the way it is.
Never mind folks- just found the answer. Fof the years 2010-2012, UPS averaged 39.4% in corporate taxes while FDX came in at NEGATIVE .1%. Keep in mind this honorable American sits on the "Business Roundtable" representing the finest minds for how to stimulate the economy. Clearly, he may not be good at coming up with U.S. domestic ideas but he sure can goose his own corporate profit structure. He should re-name himself the lobbyist king.
Not to defend FDX but are they breaking any laws by doing this? If they are following all the laws and this is the result, do you blame FDX or the laws? As a shareholder, I want UPS to be maximizing by ROI and I hope their accountants are looking at every law and every legal tax exception to pay the lowest taxes possible and maximize ROI to the shareholders. If the laws upset you, take it up with your elected officials. FDX, and many other firms, are simply following the laws that our elected officials have created.