As the United States’ largest corporations continue their unprecedented stock buyback spree in the wake of President Donald Trump’s US$1.5 trillion tax cut, new government data published on May 22 shows that US banks are also smashing records thanks to the Republican tax law. They raked in $56 billion in net profits during the first quarter of 2018 — an all-time high.
The new data, released by the Federal Deposit Insurance Corporation (FDIC), comes as the House of Representatives is gearing up to pass a bipartisan deregulatory measure that would reward huge Wall Street banks such as JPMorgan Chase and Citigroup while dramatically raising the risk of another financial crisis.
The Senate easily passed the bill in March with the help of 16 Democrats.
The banking industry’s record-shattering profits fit with an entirely predictable pattern that has emerged after the passage of the Republican’s tax bill in December: the most profitable corporations are posting obscene profits and using that cash to reward wealthy shareholders through stock buybacks while investing little to nothing in workers, despite their lofty promises.
According to a CNN analysis published on May 20, “S&P 500 companies showered Wall Street with at least $178 billion of stock buybacks during the first three months of 2018.”
Major corporations are on track to send $1 trillion to rich investors through buybacks and dividend increases by the end of the year.
Most Americans, meanwhile, have said they are seeing very few noticeable benefits from the huge tax cuts. According to a new study by United Way, nearly half of the US population is still struggling to afford basic necessities such as food, housing and health care.
“The Trump/Republican tax plan has been nothing but a giant gift to corporations so that executives and shareholders can get richer,” Senator Bernie Sanders wrote in a Facebook post on May 22. “We’ve got to repeal the outrageous corporate welfare of this tax plan and pass real tax reform that actually helps working families — not the one percent.”
Congress is preparing to provide an even greater windfall to wealthy bankers by gutting crucial post-crisis regulations and putting taxpayers on the hook for yet another bailout.
[Abridged from Common Dreams.]