FedEx hosted a birthday party for Collins, she gave them the gift of not paying taxes
In 2010, Senator Susan Collins was thrown a birthday party by a corporate lobbyist at a Capitol Hill townhouse owned by FedEx. A short distance from the U.S. Capitol building, such spaces are routinely purchased and leased by lobbyists for events where they get facetime with federal lawmakers.
Seven years later, Collins’ decisive vote for the Republican’s $1.5 trillion tax cut paid off in a big way for FedEx. The New York Times reported this week that the company’s $1.5 billion tax liability in 2017 was cut to $0 last year.
According to the Times, FedEx spent $10 million on lobbying in 2017, most of it for President Donald Trump’s Tax Cuts and Jobs Act, pushed through by the GOP-majority House and Senate that year.
According to Federal Elections Commission filings, FedEx’s political action committee gave Collin’s PAC $2,500 in November 2017 as the Senate majority leadership were pressing their supposedly more moderate members like Collins and Sens. Bob Corker (Tenn.) and Jeff Flake (Ariz.) for a “yea” vote. On Dec. 20 2017, the day the Senate passed the final version of the tax bill, 51–48, FedEx gave Collins another $2,500.
FedEx’s PAC has given Maine’s senior senator $79,000 since 2001. The company’s PAC has given the maximum contribution allowed by law in one year, $5,000, to Collins’ PAC 11 times.
The company’s in kind gifts, such as donating a townhouse as a venue for a Collins fundraiser, are more difficult to track because of loopholes in federal elections rules: PACs must disclose something like lending a politician a fundraising venue, except when they also make the space available at little or no cost to charities and civic groups.
New York-based playwright Dan Aibel, who runs the Collins Watch Twitter account, flagged FedEx’s birthday gift to Collins in his 2013 blog post. He linked to original reporting by the Sunlight Foundation, a non-partisan transparency organization, which showed that Wayne Berman, a lobbyist for the multi-national investment firm Blackstone Group, hosted two fundraising events for Collins, including a birthday reception in December 2010 at the FedEx Corporate Townhouse.
How FedEx is spending its tax windfall is representative of corporate America
Rather than using the bulk of its $1.5 billion windfall to invest in employee wages or create new jobs, as Republicans, including Collins, promised corporations would do, FedEx spent more that $2 billion in fiscal year 2019 to buy back its own stock and increase dividends for its shareholders, according to the Times. This was up from the $1.6 billion the company spent on buybacks and dividends in 2018, and double the amount it spent in 2017.
One of the biggest effects of the GOP’s 2017 tax overhaul was setting off record-breaking corporate stock buybacks. Illegal before the presidency of Ronald Regan, the practice is used by executives to artificially elevate the value of a corporation’s stock by reducing the number of shares on the market, immediately increasing the value of the shares that investors already hold.
Americans for Tax Fairness, a coalition of national organizations pushing for progressive federal tax reform, reported earlier this year that stock buybacks reached $910 billion in 2018, the first year under the Republicans’ new tax law, a huge increase over the previous record of $589 billion in 2007.
FedEx’s tax windfall is quite representative of how corporations are faring under the GOP tax cuts, the Times determined. “Companies that make up the S&P 500 index had an average effective tax rate of 18.1 percent in 2018, down from 25.9 percent in 2016, according to an analysis of securities filings,” the report reads. “More than 200 of those companies saw their effective tax rates fall by 10 points or more. Nearly three dozen, including FedEx, saw their tax rates fall to zero or reported that tax authorities owed them money.”
(Top photo: Chip Somodevilla | Getty Images)