The U.S. tax code is uncompetitive and overly complex, and it’s time for politicians and special interests to set aside partisan interests and pass reform legislation, JPMorgan Chase & Co. Chief Executive Officer Jamie Dimon said.
“Let’s judge any proposal on whether or not it will result in greater economic growth, more jobs and higher wages while allowing American businesses to be competitive internationally,” Dimon wrote in an opinion column for NBC News published Wednesday. “If so, let’s get it done.”
Dimon said a general tax reform framework released by Republican leaders of Congress and the Trump administration last month “has all of the key ingredients to fuel economic expansion.” Reducing the corporate tax rate to 20% from the current 35%, as the plans calls for, could support the creation of as many as 2 million new jobs if the savings were funneled in that direction, Dimon said, citing a study by the accounting firm EY.
JPMorgan, which reports third-quarter results on Thursday, would have seen a bump of about $1.5 billion to 2016 profit if the lower rate were in place, according to bank filings and Bloomberg calculations.
Dimon, 61, chairman of the Business Roundtable, has waded into U.S. politics in recent months as he takes a broader view after more than a decade running JPMorgan, the nation’s largest bank. About a third of his 45-page annual letter to shareholders this year addressed public policy.
In July, he railed against issues facing the U.S. and the failure of politicians to address them, saying “it’s almost an embarrassment being an American traveling around the world.” A few weeks later, he said he supported the dissolution of Donald Trump’s council of CEO advisors because he strongly disagreed with the president’s reaction to the racial violence in Charlottesville, Virginia.
A more competitive tax code would also reduce incentives for U.S. companies to relocate abroad or be acquired by foreign companies, he said Wednesday. The current system, which exposes domestic corporations to taxes in both the countries where profits are earned and at home, has “trapped more than $2.6 trillion outside the U.S.,” he said.
“Imagine what it could mean for our country if that money (and future earnings) were free to come back to the U.S. instead of sitting overseas,” Dimon said.
Tax reform should also do more for lower- and middle-class workers through programs such as earned-income tax credits, Dimon wrote.
The administration’s plan would condense the existing seven individual income tax brackets to three and cut the top individual rate to 35% from 39.6%. While many details remain unclear, it has been criticized for adding to the budget deficit and disproportionately benefit the wealthy. Trump said Tuesday that he plans to make changes to the plan within the next few weeks.
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