Less Than Year After GOP Tax Scam, Six Biggest Banks Already Raked in $9 Billion in Extra Profits

Common Dreams – By Jake Johnson – Oct 18, 2018

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Photo: Sen. Elizabeth Warren (D-Mass.) speaking at a rally 11/2017.”The reality is that this will be a tax bill that transfers 80 percent of the tax cuts to the wealthiest one percent,” warned Rep. Pramila Jayapal in her comments. (Photo: Public Citizen/Twitter).

Wall Street’s latest earning report provides further evidence of “just how rigged the system is against working people and the middle class.”

It has been nearly a full year since the Republican Party rammed through its transparent scam of a tax bill in the face of massive grassroots resistance, and the results have been almost precisely what nearly every analyst predicted: Record profits for the rich and massive corporations, little to nothing for American workers.

Among the greatest beneficiaries of the GOP’s bill have been America’s six largest banks, which this week reported soaring third quarter profits and—according to the Not One Penny coalition—have already raked in over $9 billion in extra profits as a direct result of President Donald Trump’s $1.5 trillion tax law.

“These latest filings show that big banks have stopped at nothing to make more money—and that the GOP’s tax law gave them license to put profits over people,” Not One Penny spokesperson Ryan Thomas said in a statement on Thursday, highlighting the enthusiastic earnings reports of Bank of America, Citigroup, Goldman Sachs, JPMorgan Chase, Morgan Stanley, and Wells Fargo.

“These six banks have constantly chosen to use these tax breaks to enrich their shareholders and executives while laying off employees and exploiting consumers,” Thomas noted, pointing to the explosion of stock buybacks since the GOP tax bill became law. “These shameful actions—and the Republican tax law that permitted them—indicate just how rigged the system is against working people and the middle class.”

As Common Dreams has reported, American workers have seen virtually zero gains from the GOP tax bill despite lofty promises from Republican lawmakers. Overall, even as the economy has grown at a steady clip this year, wages for most workers have actually fallen in real terms as CEO pay has skyrocketed.

These results explain why Republicans have been “running away” from their tax bill on the campaign trail in the lead-up to the midterm elections.

“Turns out a tax bill that overwhelmingly benefits rich people and corporations isn’t the most winning issue with voters,” Vox’s Emily Stewart noted on Wednesday.

Thomas of Not One Penny concluded that the GOP’s “blatant disregard for working families epitomizes why we must hold Republicans accountable for passing a tax law written solely for the wealthiest individuals and biggest corporations.”

With midterms less than three weeks away, the GOP plowing ahead with another $600 billion in tax cuts for the rich while vowing to slash Medicare, Medicaid, and Social Security if they retain control of Congress.

Here is the Not One Penny coalition’s breakdown of Wall Street’s latest earning report:

Bank of America: The bank has seen a $3.1 billion tax cut so far this year due to the 2017 tax law. It announced earnings of $7.2 billion this quarter for a total of $20.9 billion so far this fiscal year. Since the tax law was passed, Bank of America announced a $20.6 billion stock buyback program and this quarter the company spent $6.6 billion on buybacks and dividends, enriching corporate shareholders. In May, Bank of America announced the closure of an office in California, resulting in 575 layoffs. The bank also agreed to pay $15 million to settle claims that its bankers overcharged their clients on securities.

Citigroup: The bank has enjoyed a $1.3 billion tax cut so far this year due to the 2017 tax law and announced earnings of $4.6 billion this quarter for a total of $13.7 billion so far this fiscal year. Since the tax law was passed, Citigroup announced a $17.6 billion stock buyback program and this quarter, the company spent $6.4 billion on buybacks and dividends, both of which enrich corporate shareholders. Meanwhile, in June, Citibank laid over off over 100 workers, paid$100 million to settle charges that it manipulated interest rates, and was forced to spend $355 million in refunds to millions of customers it was overcharging interest.

Goldman Sachs: Due to the 2017 tax law, the bank has enjoyed a $353 million tax break so far this year. Goldman Sachs announced earnings of $2.5 billion this quarter for a total of $7.5 billion so far this fiscal year. Since the tax law was passed, Goldman Sachs announced a $5 billion stock buyback program and this quarter, the company spent $1.2 billion on buybacks and dividends, both of which enrich corporate shareholders. Meanwhile, it has closed up shop in Cedar Rapids, resulting in layoffs for 39 employees, while it constructs a new office for its outgoing CEO that could cost up to half a million dollars.

J.P. Morgan: The bank has seen a $2.1 billion tax cut so far this year due to the 2017 tax law, and announced earnings of $8.4 billion this quarter for a total of $25.4 billion so far this fiscal year. Since the tax law was passed, JP Morgan announced a $20.7 billion stock buyback program and this quarter the company spent $6.9 billion on buybacks and dividends, which enrich corporate shareholders. The company plans to spend 151 times what it spent on wage increases for workers on stock buybacks. At the same time, JP Morgan announced that it will lay off 400 employees in its consumer home-lending business. In August, the company laid off 100 employees in its asset management division.

Morgan Stanley: The bank, which has enjoyed a $738 million tax cut so far this year due to the 2017 tax law, announced earnings of $2.1 billion this quarter for a total of $7.2 billion so far this fiscal year. Since the tax law was passed, Morgan Stanley announced a $4.7 billion stock buyback program and this quarter, the company spent $1.2 billion on buybacks and dividends, both of which enrich corporate shareholders.

Wells Fargo: Wells Fargo has enjoyed a $1.5 billion tax cut from the tax law, and announced earnings of $6 billion this quarter for a total of $16.3 billion so far this fiscal year. Since the tax law was passed, Wells Fargo announced a $24.5 billion stock buyback program and this quarter the company spent $8.9 billion on buybacks and dividends, both of which enrich corporate shareholders. Last month, Wells Fargo announced a plan to cut up to 10 percent of its workforce in the next three years, a loss of between 13,250 and 26,500 jobs. Wells Fargo has been mired in scandals this year, and is involved in numerous settlements. It is being forced to pay $1 billion, the largest fine ever imposed by the Consumer Financial Protection Bureau, in addition to millions more in refunds to customers for misleading and predatory practices.

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Posted by Teri Perticone

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