The Trump Tax Scam™ has already saved taxpayers billions of dollars, and when I say "taxpayers", I mean the nation's six largest banks who posted record profits in Q1 2018.
The nation’s six big Wall Street banks posted record, or near record, profits in the first quarter, and they can thank one person in particular: President Donald Trump.
While higher interest rates allowed banks to earn more from lending in the first quarter, the main boost to bank came from the billions of dollars they saved in taxes under the tax law Trump signed in December. Combined, the six banks saved at least $3.59 billion last quarter, according to an Associated Press estimate, using the bank’s tax rates going back to 2015.
Big publicly traded banks — such JPMorgan Chase, Citigroup, Wells Fargo, Goldman Sachs, Morgan Stanley and Bank of America — typically kick off the earnings season. Their reports for the January-March quarter are giving investors and the public their first glimpse into how the new tax law is impacting Corporate America.
Before the change in tax law, the maximum U.S. corporate income tax rate was 35 percent, not including what companies paid in state income taxes. Banks historically paid some of the highest taxes among the major industries, due to their U.S.-centric business models. Before the Trump tax cuts, these banks paid between 28 to 31 percent of their income each year in corporate taxes.
The results released over the past week show how sharply those rates have dropped. JPMorgan Chase said it had a first-quarter tax rate of 18.3 percent, Goldman Sachs paid just 17.2 percent in taxes, and the highest-taxed bank of the six majors, Citigroup, had a tax rate of 23.7 percent. This is just one quarter’s results, however, and bank executives at the big six firms have estimated that their full-year tax rates will be something closer to 20 percent to 22 percent.
$3.6 billion per quarter comes out to roughly $14 billion a year for the six largest banks in America, and I'm sure all that money is going to the employees in the form of raises and to customers in the form of reductions in fees and service charges.
I mean, that's what Trump promised, right?
Oh, you mean that's not what the banks are doing?
Shares of Bank of America rose 0.3 percent in Tuesday midday trading after the bank announced it would be buying back an additional $5 billion worth of shares.
The board of directors approved the additional repurchase, which will occur through June 2018. The company had previously announced plans to repurchase $12 billion in common stock earlier this year.
In a statement from Bank of America, the repurchase program "will be subject to various factors, including the company's capital position, liquidity, financial performance and alternative uses of capital, stock trading price, and general market conditions, and may be suspended at any time."
Bank of America shares are 31 percent higher this year, with a 4 percent jump in the last one month alone, as investors bet that banks will be one of the top beneficiaries of tax reform.
That was in December. Shares went up all the way into March before last month's Trump Tariff crash shaved BoA's share price back down to those December levels. But hey, BoA has enough money to buy $17 billion in stock since Trump got elected.
That's just one of the big six.
And they just got another $600 million a piece this quarter.
But sure, her emails.