The CEO of America’s largest bank touted billions in additional profits thanks to Republican tax cuts signed into law by Donald Trump in 2017 — as new research reveals adverse impacts on the nation’s poorest communities stemming from the legislation.
JPMorgan CEO Jamie Dimon released an annual investment letter on Thursday that said the president’s tax cuts added to the bank’s net profits by a staggering $3.7bn (£2.8bn).
“All things being equal (which they are not), the new lower tax rates added $3.7 billion [£2.8bn] to net income,” he wrote, before celebrating the GOP’s tax bill.
“The new tax code establishes a business tax rate that will make the United States competitive around the world and frees US companies to bring back profits earned overseas,” the letter continued. “The cumulative effect of capital retained and reinvested over many years in the United States will help cultivate strong businesses and ultimately create jobs and increase wages.”
The optimistic view from JPMorgan — which is considered the sixth largest bank in the world as of last year — about Mr Trump’s tax cuts sharply contradicts research produced by the Tax Policy Centre, Joint Committee on Taxation and the Congressional Budget Office, which showed the poorest Americans suffering sharp declines in after-tax income.
The Washington Centre for Equitable Growth produced a chart showcasing the harrowing impact the bill could potentially have on the nation’s poorest communities by 2025.
While the richest Americans would see an increase of nearly three per cent in their after-tax income over the next several years, the poor will lose after-tax incomes at just about the same rate, according to the research.
The loss in poor American’s post-tax income derives from the Republican leadership’s decision to repeal the Affordable Care Act’s individual mandate, Vox reported.
Income inequality remains a prevalent issue across the US, meanwhile, as studies indicate the rich are continuing to get richer as the poor are getting poorer nationwide.
A paper published by the nonpartisan Economic Policy Institute last year revealed income rates for the country’s top one per cent were rising far more rapidly than that of the bottom 99 per cent in 43 states.
In at least nine states, the top one per cent accounted for at least half of all income growth throughout 2009 to 2015.
Elizabeth Warren, a Democratic senator running for the White House in 2020, called on the CEO of JPMorgan to return the added profits in a tweet on Thursday that referred to the Republican tax legislation as a “#GOPTaxScam”.
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