Who knew that when Donald Trump campaigned on behalf of “forgotten Americans,” he really meant the banks?
Earlier this month, the top six U.S. banks posted earnings showing they saved $18 billion in 2019, money they used to increase payouts to shareholders even as they laid off workers. That was all thanks to President Donald Trump’s 2017 tax cuts: Before the law, the banks paid an average effective tax rate of 30%; last year, it was 18%, according to an analysis by Bloomberg.
JPMorgan Chase & Co., Bank of America Corp., Citigroup Inc., Wells Fargo & Co., Goldman Sachs Group Inc. and Morgan Stanley together saved $32 billion last year in taxes, Bloomberg reported.
In the last two years, these banks have twice surpassed $100 billion in net income, a record made possible by the tax cuts, even as they cut 1,200 jobs.
Meanwhile, the real “forgotten Americans” remain forgotten.
The tax overhaul, which Trump promised would benefit middle class workers, has done nothing of the sort. Income inequality has continued to grow and will continue to get worse due to Trump’s tax law, which overwhelmingly benefits corporations and the wealthiest individuals.
The Bloomberg analysis also points out the extent to which defenders of the law failed in their predictions. While many argued that corporate tax cuts would lead to job creation and help workers, the reality is starkly different.
The top six banks had collectively cut their workforce by about 1,200 people by the end of 2019 compared to two years earlier. And the biggest beneficiaries are bank shareholders – the banks announced last year that they will increase stockholder payout by $21.5 billion, an increase of 14%.