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To: Fredrick W. Smith

Chairman and CEO, Fedex Corporation

Memphis Tennessee

Dear Mr. Smith,

I recently read with great interest your response to the New York Times’ recent investigation into your company’s tax rate and investment.

I doubt A.G. Sulzberger will take you up on your offer for a debate, but I am happy to stand in his stead.

As Chair of the Patriotic Millionaires, a group of hundreds of wealthy business people and investors who are very concerned about the growing inequality in our country, I have many thoughts about “federal tax policy and the relative societal benefits of business investments,” and I would wager that they differ greatly from your own.

I believe that a nation with a few rich people and lots of poor people will not work well for any of us, not for investors like you and me, not for your 425,000 or so employees, and not for the millions of people who make your business successful by shipping and receiving packages every day.

You were an ardent champion for the Tax Cuts and Jobs Act, a clearly regressive bill which handed over a trillion dollars in tax cuts to the wealthy people who own businesses or stock while doing almost nothing for working Americans. Despite your claim in your recent Wall Street Journal op-ed that “there is little doubt the significant increase in US employment and wages since the last tax cuts were passed is due to the decrease of corporate tax rates,” the generally accepted consensus among economists is that the bill failed to make any significant impact on employment or wages. It did, however, make a lot of rich people a lot richer.

You fought particularly hard for this cut to the corporate tax rate, which you said would allow FedEx to spend more on new technology, equipment, and expanded hiring. Yet when you finally got your tax cut to the tune of over $1.5 billion, FedEx actually ended up investing less in 2018 and 2019 than it had predicted before the tax bill was even passed. You say in your op-ed that “had the tax cuts not passed, we would have significantly lowered capital expenditure in 2018,” but you ended up lowering capital expenditures below your 2017 predictions anyway despite over a billion dollars in tax breaks.

So where did that money go? Well, we know you spent over $2 billion in 2019 and $1.6 billion in 2018 on stock buybacks, more than double the amount you spent in 2017. I assume it’s just a coincidence that your choice to prioritize stock buybacks, which do nothing to help the long-term financial health of a corporation, happened to have a side effect of making your own holdings in FedEx stock much more valuable.

It’s interesting that although you called the New York Times article “distorted and factually incorrect,” you failed to point out any piece of the story that was actually factually incorrect. I know that if a story about me had false information that painted me in a bad light, I would want to use my public platform to correct those facts.

You made a public promise that your corporate tax cut would lead to investment, then you spent it on stock buybacks to make yourself and your shareholders richer. If my son had asked for money to give to a school charity and then I later found out he spent it all on candy, of course I would not accept that. You got called out on your own duplicity, don’t act like you’re a victim here.

If you think anything that I’ve written is incorrect or unfair, please let me know. I’d be happy to have a full discussion in a public debate of FedEx’s tax record and the real societal value (or lack thereof) of giving corporations massive tax cuts.

I’m sure you’re equally eager to have this important discussion — you must be extremely concerned about this subject matter to make such a public invitation for debate. If your offer to debate was just an empty gesture that you did not plan to be accepted, let me know and I will stop bothering you. But I hope you were serious, and that we can schedule a public debate with you and your team and some people from The Patriotic Millionaires.

Regards,

Morris Pearl