INDIANAPOLIS – Wells Fargo, who has appeared in the news most notably in 2017 for a series of scandals that included opening millions of accounts using customers’ information without their awareness, would be one of the biggest corporate benefactors under the McConnell tax bill.
According to an analysis by S&P Global Market Intelligence, many large and international banks would have been the biggest beneficiaries under the initial House Republican plan that cut the top marginal corporate tax rate from 35% to 20%, but the biggest would have been Wells Fargo. The bank earned $32.1 billion last year before taxes, but under a 20% top rate, its net income would have been $3.7 billion higher. That would have been a larger increase than any other company in the S&P 500. Between Wells Fargo, Bank of America, Citigroup, J.P. Morgan Chase, and U.S. Bancorp, after-tax profits would have risen by $11.5 billion in one year alone.
The final McConnell bill Congress is expected to vote on this week will have a top corporate marginal tax rate of 21%. While the 1% difference between the House bill and the final bill is likely enough to mean that Wells Fargo no longer gains more from the bill than any other S&P 500 company, it still would be expected to remain one of the bill’s largest beneficiaries.
Wells Fargo’s income boost is an unlikely Christmas present for a company that spent most of the year garnering the wrong sort of headlines. The bank has received congressional scrutiny for a scandal where employees and management opened more than 3.5 million accounts with customers’ names and information without their awareness. The company is paying a total of $6.1 million to refund customers for unauthorized bank and credit card accounts, and it comes after a $142 million class action law suit was settled to cover the opening of fake accounts dating back to 2002.
The bank also came under fire for compelling as many as 570,000 customers to buy unneeded auto insurance, which led to tens of thousands of borrowers having their cars repossessed. Additionally, it faces a lawsuit for overcharging small businesses for credit card transaction fees.
As a member of the Senate Banking Committee, Joe Donnelly helped hold Wells Fargo accountable for the scandal. He wrote a letter with other committee members last December demanding answers relating to the bank’s sales practices. He also criticized the lack of responsibility taken by senior executives in the scandal’s wake, saying that “it’s not a square deal when the people that are fired are the tellers who make 15 bucks, and the senior execs walk off with $100 Million.”
“This year, few companies have harmed American consumers and American small businesses like Wells Fargo—and yet, to end the year, few companies stand to benefit as much from the McConnell tax bill,” said Will Baskin-Gerwitz, Senior Media Strategist for the Indiana Democratic Party. “Washington Republicans like Congressman Messer and Congressman Rokita ought to be building a tax code that helps working families and the small businesses that employ them here in America, not the company who has been in the news most recently for ripping them off.”
This release is part of day nine of the Indiana Democrats’ 12 Days of Taxes, a daily series highlighting the problems the McConnell tax bill would create if passed this holiday season. While the McConnell plan would raise taxes on middle class Americans to fund more tax breaks for the wealthy and major corporations, its consequences stretch across American life.