7/19/2019

BUSINESS/TAXES/TRUMP AS PRESIDENT: “President Trump’s tax cuts have been very good to big banks. For foreign-owned banks, they could get even better. The cuts allowed America’s largest banks to save an estimated $16 billion collectively in taxes last year, a windfall that helped those firms reward shareholders through stock buybacks and dividend payments. The savings flowed largely from changes to the corporate rates, which fell to 21 percent from 35 percent under the new law. For years, domestic banks’ effective tax rates had been higher than those of many other companies’, so when they fell, those institutions enjoyed outsize benefits. Foreign-owned banks reaped benefits as well, though the structure and reporting of their global financial operations make them more difficult to quantify. Late last year, they won a potentially lucrative victory in a proposed Treasury Department regulation that puts into effect a part of the 2017 tax law that established a global minimum tax on multinational corporations. Analysts say the proposed regulation, which companies must apply even though it has not been made final, could allow foreign banks to largely avoid the minimum tax.”

Jim Tankersley and Peter Eavis, “Foreign-Owned Banks’ Results Could Sweeten Further Under Tax Law,” The New York Times online, July 19, 2019