On Friday, the Associated Press published an article that used the first quarter earnings from the nation’s six big banks to claim “the main boost to bank came from the billions of dollars they saved in taxes under the tax law Trump signed in December.” It claimed the effective tax savings of six of the largest banks in the United States was around $3.6 billion.
Here is what AP didn’t tell you:
- The American people are benefiting far and away the most from the new tax reform law. The savings for the banks in the first quarter as calculated by the AP pales in comparison to the savings that American households experience.
- Even the Washington Post acknowledges that if you were to divide the banks’ savings by household, it would equate to $11 for every American individual or $28 for every American household. In contrast, the tax cuts for individuals and families amount to $1,600 annually for every tax filer. That’s 57 times the amount.
- Furthermore, according to the Joint Committee on Taxation, out of the total tax reduction of $1.456 trillion in the Tax Cuts and Jobs Act, $1.126 trillion – or over 75 percent – would go to individuals and pass through entities.
- Yes, American banks, small and large, benefit from a reduced corporate tax rate. A reduction in taxes from 35 to 21 percent is going to be good for business—and that’s the point. Reduced taxes allow businesses to reinvest more in America, hire more workers, and deliver bonuses, wage increases, and better benefits to their workers.
BOTTOM LINE: The AP missed the point, again. The American people are benefiting far and away the most from the new tax reform law. To paint a picture otherwise is to misrepresent the scale and scope of how much this law benefits hardworking Americans.