Biden’s tax plan could hike costs on largest US banks, study finds
JPMorgan, Bank of America and Citigroup stand to be the most affected, study finds
Former Vice President Joe Biden’s proposed tax plan may not just spell bad news for the nation’s wealthiest individuals, but also its wealthiest banks.
The 10 largest banks in the U.S. could see their combined yearly net income decline by more than $7 billion, according to an S&P Global Market Intelligence analysis, owing to a bid to moderately raise the corporate tax rate.
Biden has proposed increasing the corporate tax rate to 28 percent. The Tax Cuts and Jobs Act reduced the corporate tax rate to 21 percent, from 35 percent.
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The banks that stand to be most negatively affected, according to S&P Global Market Intelligence, are JPMorgan Chase, Bank of America, Citigroup, Wells Fargo and Truist Financial Corp.
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As previously reported by FOX Business, in addition to raising the corporate tax rate, Biden’s tax plan would increase rates for people earning more than $400,000 and cap itemized deductions for the wealthiest Americans.
He has proposed taxing capital gains at the same rates as ordinary income and lowering the basic exclusion amount for the estate and gift taxes.
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The Tax Policy Center estimates Biden’s proposals would increase federal revenues by $4 trillion between 2021 and 2030, relative to current law. It would also disproportionately raise taxes on the top quintile of the income distribution.