Democrats are going after Donald Trump’s tax plan following a report that FedEx paid nothing in taxes for fiscal 2018, reviving criticism that the president’s signature tax cuts are most favorable to corporations and the wealthy, rather than average Americans.
A report from The New York Times on Sunday found that the shipping corporation paid nothing in taxes after Trump signed a $1.5 trillion tax cut with deep cuts to corporate tax rates. The report noted that FedEx had been aggressive in lobbying Trump to pass the tax cuts. FedEx had paid $1.6 billion in taxes for fiscal 2017.
A number of Democrats attacked Trump for the news, including presidential candidates Bernie Sanders and Elizabeth Warren.
“Where did the money from Trump’s ‘tax cuts for the middle class’ go? To wealthy corporations who have spent $1 trillion buying back their own stock to enrich executives and wealthy shareholders,” Sanders tweeted. “That’s not acceptable.”
Sanders has made corporate tax reform a major plank of his 2020 campaign, vowing to make them pay a more fair share of taxes in order to fund plans like Medicare for All.
The New York Times report also found that many corporations have failed to follow through on pledges to reinvest tax savings and raise wages for their employees. After FedEx CEO and founder Frederick Smith said that “there is no question in my mind that we would see a renaissance of capital investment” due to the tax cut, the report found that the company’s corporate investments actually fell in both fiscal 2018 and 2019.
Though the report focused on FedEx, The Hill noted that nearly all of the top three dozen U.S corporations saw tax rates fall to equal or less than zero due to Trump’s tax cuts.
Critics have long attacked Trump’s tax plan for reserving the majority of savings for the wealthiest Americans and largest corporations. They also say that the cuts have failed to have the effects Trump predicted, a criticism backed up by a report from CNBC earlier this year that found the cuts did little to stimulate the economy. The Congressional Research Service noted that of the 2.9 percent economic growth in 2018, only a small fraction came from Trump’s tax cuts.
“This growth is smaller than overall growth in labor compensation and indicates that ordinary workers had very little growth in wage rates,” the CNBC report cited economists Jane Gravelle and Donald Marples in an analysis of the tax cuts.