Billionaire banking executive Jamie Dimon is supporting the Buffett Rule – a policy of increasing taxes on millionaires to reduce the national debt.
The CEO of JPMorgan Chase said he supports the idea that would impose a minimum tax rate of 30 percent on individuals earning over a million dollars annually. This comes as the national debt, nearing a million dollars per American family in 2017, remains a pressing concern.
The Road To A Trillion-Dollar Debt
Dimon – who recently expressed concerns about persistent inflation – offered his perspective in a Wednesday PBS interview. He suggested that reducing the national debt – surpassing $35.12 trillion – is achievable while maintaining significant expenditures on defence, infrastructure, and earned income tax credits.
“I would spend the money that helped make it a better country,” the 68-year-old JPMorgan chief said, adding that he favours 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,” he said.
In 2012, the Obama administration proposed the “Buffett Rule,” a policy stipulating that households earning over $1 million annually should pay a minimum tax rate equal to or higher than the average rate paid by middle-class families.
The rule, which never became law due to congressional opposition, originated from an interview in which the billionaire investor spoke to ABC News about his concerns over growing income inequality in the United States.
The Widening Tax Gap
Buffett, whose net worth was estimated at $138 billion by the Bloomberg Billionaires Index as of Wednesday, highlighted the disparity in tax rates. While he paid a 17.4 percent tax rate, his secretary, Debbie Bosanek, paid a significantly higher rate of 35.8 percent on her income.
Seated beside Bosanek, Buffett, who publicly disclosed his tax returns to the Disney-owned news outlet, said: “I have never had it so good. … What has happened in recent years, we were told a rising tide would lift all boats, but the rising tide has lifted all yachts.”
Then-President Barack Obama invited Bosanek to attend his January 2012 State of the Union address, where she was seated alongside Laurene Powell Jobs and then-First Lady Michelle Obama. However, with wealth inequality worsening, the tax code has become more progressive lately.
The IRS report from 2021 shows a significant disparity in tax rates between the highest and lowest income earners:
- Top 1 percent earners: Paid an average tax rate of 25.9 percent in 2021.
- Bottom 50 percent earners: Paid an average tax rate of 3.3%, significantly lower than the top 1 percent.
This data reflects a trend of higher-income individuals contributing a larger proportion of overall tax revenue. The United States last recorded a budget surplus in fiscal year 2001, amassing a surplus of $128 billion.
Since then, a confluence of crises has contributed to a burgeoning national debt. These include the September 11 attacks and subsequent wars, the dot-com bubble burst, the housing market collapse and ensuing recession, the auto industry bailout, the COVID-19 pandemic, and other economic challenges.
The debate over tax fairness and government spending intensifies as the nation grapples with a ballooning national debt. Finding a sustainable path forward requires careful consideration of these pressing issues.
