JPMorgan Chase CEO Jamie Dimon criticized President Joe Biden’s proposed tax code changes and warned they would make the United States less competitive.
Dimon, who testified before the House Financial Services Committee on Thursday, was asked about Biden’s proposals, which feature alterations to the corporate tax structure.
The administration is seeking to increase the corporate tax rate from 21% to 28% and double to 21% the tax on global intangible low-taxed income, known as GILTI, a provision of former President Donald Trump’s tax overhaul that is meant to ensure that foreign earnings of U.S. multinational companies are taxed at a rate of at least 10.5%. The Treasury Department is in talks with other countries about a 15% global minimum corporate tax rate.
“The Biden tax number has taxes going from 21% to 28%, which is halfway back to what we think we had in 2017 before the last tax act at 35%, but the tax increase is actually four times what the tax decrease was from 2017,” Dimon said. “We all know the phrase ‘the devil is in the details.’ Well, the details here are all that matter, not the top line of 28%.”
“If you want to have a healthy, growing, competitive America against the rest of the world, you need a global competitive tax rate because at the margin, capital will be retained and invested overseas — the same capital that you want retained and invested over here,” Dimon said, adding that he thinks the higher corporate taxes will be detrimental to a lot of companies and that there are better ways to collect taxes.
In a separate line of questioning during the hourslong hearing, the JPMorgan executive said the changes to the tax structure would “be a mistake for America.”
While Biden is planning to fund his infrastructure package using the corporate tax increases, he has also proposed tax hikes to fund his American Families Plan, which would raise the top individual income tax rate to 39.6% and tax capital gains for households making more than $1 million as ordinary income.
In addition to Dimon, Charles Scharf of Wells Fargo, Brian Moynihan of Bank of America, David Solomon of Goldman Sachs, James Gorman of Morgan Stanley, and Jane Fraser of Citigroup all testified at the Thursday hearing. The group of industry leaders previously testified on Wednesday before the Senate banking committee.