People walk down Wall Street in New York City.
Photo by Spencer Platt/Getty

Republican tax plan delivers for Wall Street’s big banks

On the Senate floor last night, during the debate over the Republican tax plan, Sen. Sherrod Brown (D-Ohio) delivered remarks near the side door to the chamber, and pointed at the nearby hallway. He asked his colleagues to consider “what happened down this hall.”

As the Ohio Democrat explained it, “Wall Street lobbyist after Wall Street lobbyist walked in that door and out that door…. They didn’t carry bags of money themselves – that would be uncouth – but they sure wrote provisions in this tax bill that provide bags of money for their companies.”

Brown’s point has the benefit of being true. Reuters reported yesterday that banks are expected to benefit greatly from Republican changes to the tax code, and as Vox noted, one finance giant in particular is going to get an especially big boost, despite its recent controversies.

Wells Fargo in 2016 was fined $185 million for issuing millions of fake credit card accounts. In 2017, it was caught overcharging clients on currency trades and improperly charging homebuyers to lock into low mortgage rates.

And in 2018, it could be about to get the best tax deal of all the big banks.

The Republican tax bill, which seeks to lower the corporate tax rate to 21 percent from 35 percent, would lead to an average 14 percent in earnings growth for seven of America’s largest banks next year, according to a Monday note from Goldman Sachs analyzing the plan’s implications. (Goldman does not include itself in its analysis.) The biggest winner: Wells Fargo, which would see its earnings jump by 18 percent thanks to the GOP proposal.

Earlier this year, Donald Trump spoke at CPAC and assured conservatives, “The GOP will be, from now on, the party also of the American worker…. We will not answer to donors or lobbyists or special interests.”

It was as audacious a lie as any Trump has told.

Indeed, if Wall Street’s largest banks are among the biggest beneficiaries of the Republican plan, the biggest losers are those who believed Trump’s campaign rhetoric.

As regular readers may recall, there were voters last year who helped elect Republicans because they were concerned that Hillary Clinton might not be tough enough on Wall Street. Indeed, Trump swore up and down for months that it was Clinton who’d do Wall Street’s bidding, while Americans could expect his administration to stand up to the finance industry and its lobbyists. Millions of voters actually believed he’d be “tough” on Wall Street.

Oops.