According to Trump’s proposed tax plan released on Wednesday, the corporate tax rate may drop a whopping 15%. The new proposed rate of 20% is highly beneficial for corporations especially for the six largest US banks that include JPMorgan Chase, Bank of America, Wells Fargo, Citigroup, Goldman Sachs, and Morgan Stanley that can increase profits by billions..
Jamie Dimon JPMorgan CEO, labelled the proposal as “an encouraging step forward”. He also stated that, “Congress must act with urgency on this framework and move the legislative process forward”.

Earlier this year, bank stocks rallied on bets that Trump’s tax plan would bring forth not only economic growth but corporate profits as well. Wednesday, some of the larger bank’s stocks climbed 1.6%, gaining 40% over the past year.

But, there has been a negative aspect seen for lenders like Bank of America and Wells Fargo. The proposal to limit the deductibility of interest expense for corporations is on their radar. This would affect the after-tax return on investment.

Robert Willens, tax consultant based out of New York believes that banks will still be able to deduct their own interest payments being that most of their funding is a result of loans and borrowings. Willens also believes, “It would be highly unlikely and unusual to not have a carve-out for businesses that literally use money as their raw material,”.

Democratic Senator Elizabeth Warren, said in a statement that she believes Trump’s plan “delivers massive tax cuts to millionaires and giant corporations and kicks working families to the curb”.

Warren stated there is, ‘Not one penny in tax cuts for the wealthy and giant corporations,”. Warren, an advocate for stricter regulations against large U.S. banks, swears to challenge the proposal added, “Especially not on the backs of everyone else.”