U.S. Bancorp and TCF Financial, two of Minnesota's biggest banks, are giving bonuses to workers, increasing charitable donations and telling investors to expect lower tax expenses as a result of the new federal tax law.
U.S. Bank also said Tuesday it would raise the minimum wage of its hourly employees to $15.
The companies join a list of large employers, particularly in the financial sector, to publicly declare that they will spend on workers some of the savings they anticipate from lower corporate tax rates in the law.
"We believe that tax reform is positive for the U.S. economy because it provides an immediate opportunity to benefit employees, communities and customers," Andy Cecere, chief executive of Minneapolis-based U.S. Bancorp, said in a statement.
The law cuts the top federal tax rate from 35 percent to 21 percent for corporations. Most large companies already reduce their tax rate through deductions and credits. U.S. Bancorp paid an effective tax rate of 29 percent before the new law was enacted, a spokesman said.
The company is on pace to pay $2.4 billion in income taxes this year, slightly higher than last year, after paying $1.8 billion through September. Its profit was $5.9 billion in 2016 and it paid out one-third of that in dividends to shareholders.
Before the new tax law, finance and insurance companies would have paid an effective corporate tax rate of 26.1 percent next year, according to the Associated Press. Now, it will be 14.3 percent.
Analysts at Goldman Sachs have estimated that the tax law will boost big-bank earnings per share by 13 percent next year. The top beneficiary will be Wells Fargo, which Goldman Sachs estimates will see an 18-percent earnings surge in 2018.
