J.P. Morgan Chase CEO Jamie Dimon has declared that he does not mind paying higher taxes as long as they are used where they are “most effective”.
His comment comes as something of a bolt from the blue in the midst of a polarizing debate on whether the highest-earning Americans should be required to pay a top marginal tax rate of 70 percent as proposed by a number of prominent House Democrats.
Speaking to CNBC on Wednesday, Dimon said:
I believe that individuals earning the most can afford to pay more, and I have no problem paying higher taxes to address some of the fundamental challenges and inequities in our society. However, we need to ensure that our tax dollars are going where they can be most effective — like expanding the earned income tax credit and other programs that support the people and communities who really need it.
Much Ado About Higher Taxes
The proposal generating a considerable furor in the American political space states that a tax rate of 70 percent should be levied on all income earned over a threshold of $10 million annually and on individuals with more than $50 million in assets. Aimed at curbing rising economic inequality by providing funding for more social and infrastructural investment, it is being jointly pushed by Alexandria Ocasio-Cortez, newly elected rep for New York and Senator Elizabeth Warren who represents Massachusetts.
The proposed wealth tax, which predictably has received fierce criticism from high ranking Republicans and business figures, will affect an estimated 0.1 percent of the American population – something that is not lost on both grassroots Democrats and Republics. Polls taken since the policy announcement have shown that about 59 percent of all eligible voters agree with her, including 45 percent of Republican voters.
The goal according to Ocasio-Cortez is to bridge the widening gap between the rich and the poor, with the understanding that extreme wealth and poverty should not exist side-by-side in the world’s wealthiest economy. Speaking in a recent interview with writer Ta-Nehisi Coates, the Rep-cum-social media sensation said:
I do think a system that allows billionaires to exist when there are parts of Alabama where people are still getting ringworm because they don’t have access to public health is wrong.
The proposed top marginal tax hike was one of the issues addressed at the recent World Economic Forum in Davos, Switzerland. At the event, most attendees objected to the idea of a ‘wealth tax’, with the notable exception of historian Rutger Bregman who colorfully described their protestations as “bullshit”.
At the moment, the top marginal tax rate in the United States is 37 percent on earnings above $510,300 for individuals and $612,350 for couples. Despite the controversy generated by the supposedly ‘radical’ tax proposal, it still falls some way short of the 91 percent tax on earnings above $400,000 under the mid-20th-century governments of Dwight Eisenhower and Harry Truman.