Banks could pay $11 billion more in taxes if Biden rolls out his campaign's corporate tax proposal
Big banksmay see an $11 billion taxhike under Biden's proposal, according to a new Bloomberg report.
- The increase is a reversal from Trump's 2017 tax cuts that saved banks billions in the last three years.
- The tax increase may be countered by rising interest rates, a Wells Fargo analyst said.
The six largest banks could face an $11 billion tax increase under President-elect Joe Biden's proposal - a reversal from the billions in savings after President Donald Trump's 2017 tax cuts, according to Bloomberg.
Biden has said he would increase the corporate tax rate to 28%, from its current 21%. The soon-to-be-president has also said the proposed tax increase likely wouldn't come until at least 2022, as the economy continues to recover from the COVID-19 pandemic.Wells Fargo analyst Mike Mayo told Bloomberg that a tax increase would be a "concrete negative for banks." But he added that the current low interest rates are a "much bigger" impact to banks, and anything that would increase interest rates is a positive.
Biden also plans to raise taxes on individual income, capital gains and payroll taxes on individuals making more than $400,000, according to the Tax Foundation, an independent tax policy nonprofit. In all, Biden's proposals would raise tax revenue by $2.8 trillion over the next decade, and would lower gross domestic product by 1.62% in the long-term, the Foundation calculated.
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