SINGAPORE – J.P. Morgan Chase’s Chief Executive Jamie Dimon said he’s not against higher taxes on the rich, but a wealth tax is not the way to do it.
“A wealth tax is almost impossible to do,” he told CNBC-TV18 at the J.P. Morgan India summit on Tuesday when he was asked whether he’s in favor of such a proposal put forth by several Democrats.
“I’m not against having higher tax on the wealthy. But I think that you do that through their income as opposed to, you know, calculate wealth which becomes extremely complicated, legalistic, bureaucratic, regulatory, and people find a million ways around it. I would just tax income,” he said, suggesting that it’s harder to cheat on such a tax because income is “given.”
The wealthy in the U.S. have started preparing for tax increases that are likely to come in the coming years as government deficits at both state and federal levels rose due to the Covid-19 pandemic. Governments have increased spending to manage the health and economic crises, which at the same time caused their revenue to fall.
A study published last year by the Organisation for Economic Co-operation and Development found that the U.S. lost more tax revenue than any other developed country in 2018, largely due to U.S. President Donald Trump’s tax cuts.
Democratic presidential nominee Joe Biden had said that he would roll back most of Trump’s multitrillion-dollar tax cuts – which some reports said benefited businesses and higher-income individuals the most.
But Dimon said the president’s tax policies are among some of the “very good things” that he’s done for the U.S. economy. He explained that the U.S. has traditionally been a “red tape society” with a bureaucracy that “slows down a lot of business.”
“And I remind people, the world, when you slow down the economy, you are hurting the disadvantaged more than anybody else,” he said.
Dimon also said that governments should put more thought into how taxes are structured so that the economy can grow.
“There’re taxes which will slow down growth, like taxes on capital formation, or labor; and there’re taxes which will not affect growth like taxes on, you know, well-to-do people like me,” said Dimon.
“And I just think there should be far more thought about taxation … if you want an active, healthy growing economy.”