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In 2023, America will get its first major overhaul of its tax code in nearly thirty years. The current bill, known as the Tax Cuts and Jobs Acts of 2017, made sweeping changes to the federal tax system by reducing individual income taxes and providing a 20 percent deduction for pass-through businesses. Building on the previous laws' success, one part of the bill that was omitted from the original legislation is a new 2% excise tax on large banks. The House passed this measure in December 2018 while the Senate has yet to take up it's version.
The tax bill was originally crafted to raise additional revenue to help ensure the legislation complied with the $1.5 trillion limit on debt created by the Republican-controlled Congress under a procedure known as reconciliation. As a result, large banks in the United States will be taxed 2% of assets over a threshold set at $50 billion. Assets include cash and securities - essentially money lent out to customers or investors - but not loans, which are already subject to an excise tax thanks to Dodd-Frank, a law passed in 2010 after the financial crisis.
The new bank excise tax is projected to bring an additional $41 billion in revenue over 10 years.
The tax bill was originally crafted to raise additional revenue to help ensure the legislation complied with the $1.5 trillion limit on debt created by the Republican-controlled Congress under a procedure known as reconciliation. As a result, large banks in the United States will be taxed 2% of assets over a threshold set at $50 billion. Assets include cash and securities - essentially money lent out to customers or investors - but not loans, which are already subject to an excise tax thanks to Dodd-Frank, a law passed in 2010 after the financial crisis.
The new bank excise tax is projected to bring an additional $41 billion in revenue over 10 years.
