FedEx joins CVS in pressing Congress for corporate tax cut

CVS CAREMARK CORP. is among the 18 large U.S. companies, including FedEx Corp. and Boeing Co., trying to pressure Congress to cut corporate tax rates.
Posted 4/1/13

WASHINGTON - Top executives from 18 large U.S. companies, including FedEx Corp., CVS Caremark Corp. and Boeing Co., are trying to keep up pressure on Congress to cut corporate tax rates.

The executives are sending a letter to congressional leaders today, urging action on the one-year anniversary of Japan’s rate cut, which left the U.S. and its 35 percent statutory corporate tax rate as the highest in the industrialized world.

“We stand ready to support your efforts to make the U.S. more competitive,” wrote the group. “We know that some choices may be difficult and understand that base-broadeners, such as eliminating tax expenditures, may be necessary to achieve the significant reduction in the statutory rate that is required for the U.S. to better compete globally.”

Offering up tax breaks for elimination is easier for companies that don’t benefit from many of them and don’t have subsidiaries in low-tax foreign jurisdictions. CVS, for example, reports no foreign income.

The lack of agreement on how to offset the cost of a corporate rate cut -- along with political differences over broader fiscal questions -- have prevented lawmakers from turning a general agreement on revenue-neutral corporate tax rate reduction into specific law.

25 percent rate

Representative Dave Camp, a Michigan Republican who is chairman of the House Ways and Means Committee, plans to move a comprehensive rewrite of the individual and corporate tax codes through his panel this year. He hasn’t said how he would pay for reducing the rate to as low as 25 percent.

President Barack Obama last year called for dropping the rate to 28 percent and to 25 percent for manufacturers. He would eliminate breaks for oil companies, the insurance industry and private equity managers as part of the way to pay for the rate cut. The administration has also suggested options such as lengthening depreciation cycles and limiting the deductibility of interest.

Many U.S. companies, particularly in the high-technology and pharmaceutical industries, don’t pay anywhere near the 35 percent rate, making them more interested in preserving breaks than cutting rates.

Signers of the letter included Jim McNerney, CEO of Boeing, Larry Merlo, president and CEO at CVS and Frederick Smith, chairman and CEO of FedEx. Other signers were Thomas Falk, chairman and CEO of Kimberly-Clark Corp. and Robert Iger, chairman and CEO of The Walt Disney Co.

They are members of the RATE Coalition, a collection of companies that place a priority on rate reduction.

PBN Hosted

Join PBN for the best networking event and party of the winter - January 15, 2015 - the Book of Lists Party at the Providence Public Library. Reserve your spot by December 31st and get a holiday gift from PBN!
  • Best Places to Work
    Enrollment is now open for the 7th annual Best Places to Work program. Winners w ...
  • Manufacturing Awards
    Applications are now being accepted for the 2nd Annual Manufacturing Awards. Dea ...
Purchase Data
Book of Lists
Book of Lists cover
PBN's annual Book of Lists has been an essential resource for the local business community for almost 30 years. The Book of Lists features a wealth of company rankings from a variety of fields and industries, including banking, health care, real estate, law, hospitality, education, not-for-profits, technology and many more.
Data icons
Data can be purchased as single lists, in either Excel or PDF format; the entire database of the published book, in Excel format; or a printed copy of the Book of Lists.
  • Purchase an e-File of a single list
  • Purchase an e-File of the entire Book of Lists database
  • Purchase a printed copy of the Book of Lists
    Latest News