After three years of savings, top U.S. banks could face an increased tax bill of as much as $11 billion a year if President-elect Joe Biden moves forward with corporate rate hikes he campaigned on.
The industry says the 2017 cut in the corporate rate helped position lenders to support the economy when the pandemic hit. But a plan proposed by Democratic nominee Joe Biden could strain banks’ capital investment and hiring, observers say.
Sen. Pat Toomey, R-Pa., a potential chair of the Senate Banking Committee in the next Congress, is expected to announce that he is not running in 2022.
Banks earned $59.1 billion in the fourth quarter, a 133% year-over-year increase, due to a one-time charge in the year-earlier quarter and a lower effective tax rate throughout 2018.
While student, auto and credit card balances are at or near record levels, housing debt is shrinking, credit quality is weakening a bit and lending standards, at least in some sectors, are tightening.
Readers respond to the Consumer Financial Protection Bureau's overhaul of its payday loans rule, debate reforms to Fannie Mae and Freddie Mac, consider regulatory exemptions for regional banks and more.
Major U.S. banks shaved about $21 billion from their tax bills last year — almost double the IRS’s annual budget — as the industry benefited more than many others from the Republican tax overhaul.
Banks earned $62 billion in the third quarter thanks to tax reform and higher asset yields while the Deposit Insurance Fund crossed a statutory threshold.
