JPMorgan CEO backs ‘Buffett Rule,’ advocates 30% tax on millionaires
JPMorgan CEO Jamie Dimon believes higher taxes on millionaires are needed to reduce the country’s massive national debt.
In an interview with PBS, Dimon said reducing Washington’s $35.1 trillion national debt should be a priority, and would be achievable if the country’s wealthiest residents paid higher taxes.
“I would spend the money that helped make it a better country,” Dimon said, adding that he backs a “competitive international tax system. And you would maybe just raise taxes a little bit, like the Warren Buffett type of rule. I would do that. And we would be fine.”
The Buffett Rule is named after billionaire investor and Berkshire Hathaway CEO Warren Buffett, who has long advocated for a higher tax rate on the wealthy. The rule’s basic premise is that individuals who earn more than $1 million per year should pay a minimum tax rate of 30%.
The Buffett Rule made its way to the White House in 2011 when then-President Barack Obama included it as part of his tax plan. While it didn’t make it into the president’s 2012 budget, it was later submitted as part of a Senate deliberation.
Although wealth disparity has long been a sticking point in American society, the wedge between rich and poor has widened since the pandemic.
Progressive policymakers say raising taxes on the super-rich could raise trillions in additional government revenue, but not everyone is convinced it would fix the country’s fiscal crisis.
“Something has to give”
Buffett told Berkshire Hathaway’s annual shareholder meeting this year that, one way or another, Americans will be the ones who foot the bill for Uncle Sam’s lavish spending.
“With present fiscal policies, I think something has to give. And I think higher taxes are quite likely,” he said.
This means higher taxes on virtually everyone.
To lessen the blow to ordinary Americans, Buffett wants the federal government to hike taxes on corporations, which he believes are far too low.
As policymakers debate the merits of “taxing the rich proposals,” economists warn that higher tax rates aren’t a catch-all solution.
Veronique de Rugy, a senior research fellow at George Mason University’s Mercatus Center, says the U.S. government doesn’t have a revenue problem, but a spending problem.
“The fiscal imbalance is not because of reduced revenues,” de Rugy wrote in an op-ed. “Last year, federal revenue as a share of the economy was a full percentage point above the historical average.”
The Cato Institute’s Adam Michel shares this view, saying, “It’s new spending that drives the deficit.”
According to the Manhattan Institute’s Brian Riedl, even the most aggressive “taxing the rich” proposals would not generate enough noninterest savings to significantly reduce the debt.
In Riedl’s view, aggressive tax hikes would also elicit a strong response from wealthy Americans, business owners, and entrepreneurs, who may resort to income-shifting and offshoring practices to skirt additional taxes.