Economics
U.S. Banks Win $21 Billion Trump Tax Windfall Then Cut Staff, Loaned Less
- Profits and payouts surge, but it’s a mixed picture for staff
- The ‘full economic impact will take many years to observe’
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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.
By year-end, most of the nation’s largest lenders met or exceeded their initial predictions for tax savings. On average, the banks saw their effective tax rates fall below 19 percent from the roughly 28 percent they paid in 2016. And while the breaks set off a gusher of payouts to shareholders, firms cut thousands of jobs and saw their lending growth slow.