Re:FedEx responds to The New York Times article from Nov. 17...
by aantix on Monday November 18, 2019 @03:43PM
(#21567953)
Thank 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.
Re:FedEx responds to The New York Times article from Nov. 17...
by SpicyLemonZest on Monday November 18, 2019 @03:40PM
(#21567936)
Does 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?
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.