Jamie Dimon gets it wrong on taxes

Jamie Dimon had some interesting comments at a financial industry conference yesterday.

These final notes: Yesterday on the way out I played you a bit of tape from Jamie Dimon, the CEO of JPMorgan Chase, in which he said, basically, don't blame the rich for being successful.

The bit I didn't play for you was where he complained about how much tax he pays. "Most of us wage-earners are paying 39.6 percent in taxes."

Mmmm, no. Top marginal tax rate right now? Thirty-five percent, which you'd figure a banker would know.

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Kai Ryssdal is the host and senior editor of Marketplace, public radio’s program on business and the economy.
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Wages shouldn't be taxed at all, just consumption taxes. Of course we'd have to go back the a much smaller government. We can't afford the size government we have now even if you agree with all the things it's involved in today.

To: All of you who keep trying to make an excuse for his comment by referencing state income tax

From: Someone who took the time to read a little more of what he said

In the same sentence that he refers to the 39% tax, he refers to state income taxes increasing that percent to 50%. I don't really know where he gets the 39.6% to begin with (it could include SS and Medicare) but in any case I would bet that the number he is referring to is far from accurate for the typical, wealthy investment banker. The most obvious reasons being that most of their income is derived from capital gains, and that SS taxes don't apply to income beyond the first (roughly) $100,000. I get the hunch that Mr. Dimon makes a bit more than that, and thus pays an effectively lower SS tax rate than I do.

He still pays way more taxes than you, probably several orders of magnitude. In return he has access to the same roads and legal system as the nearly 50% of Americans that pay no income tax at all.

I heard a similar quote and sob story in a commentary on NBR, for the corporate tax rate, which maxes out at 35%, and that isn’t really anything close to the real figure—many pay nothing and exploit loopholes in the tax code that give them refunds. The other error in his commentary is this fallacy that the rich earn what they make, and are worth every penny of it. How many billions can one person be worth? Let’s take a vote on it. Nobody is blaming the rich for being successful; they’re blaming a toothless regulatory system that has facilitated financial fraud, a failed ideology of laissez-faire, and an increasingly regressive tax code that has and allowed the wealthy to stack the deck in the favor of the wealthy—economically and politically. Personal income is the least under-taxed, in my view. It’s passive income (capital gains) that should be taxed at a higher rate—money making money off of money. Where is the mythical “America the meritocracy” defense against that proposal? Come to think of it, where is that proposal at all?

I don't think you can blame laissez fair since we've never really had it, especially recently. How can you call it free market capitalism if the most fundamental price in the capitalist system, the price of capital (AKA interest rates) is being manipulated by a quasi federal agency- the Federal Reserve.

People like this banker and the builder Brod made their money by exploiting the market system as corrupted by Washington. In their own minds they're captains of industry when in reality more opportunists taking advantage of the corrupt system of pay to play politics.

Most states, excepting Nevada, have a personal income tax. Add that on top of the highest marginal federal rate and Mr. Dimon's estimate seems reasonable, if not on the low side. Some cities also have income taxes (NYC) and, as other commenters have pointed out, this estimate excludes the many other taxes on consumption, real estate transfers, air travel, employment, property, etc.

Most plausibly he was thinking of the top marginal federal personal income tax rate of 39.6% that applied during much of the Clinton administration. That was the top marginal federal personal income tax rate from 1993 to 2002.

Oh, I'm sure when Jamie made that remark he adroitly did a mental summary of all the taxes, surcharges, fees and bridge tolls he has paid over the past eleven years.

Yeah you'd figure a banker would know... You'd also figure the host and senior editor of Marketplace would know a thing or two about state and local taxes, capital gains, and AMT.

Sure is nice of him to be maintaining those highways the rest of us enjoy, but let's increase his taxes.

Could Mr. Dimon have been talking about all taxes paid, including state income tax, social security tax, medicare tax, property taxes, sales taxes, and even those annoying extra charges that show up on your phone bills? I would be interested to know an estimate of what percentage of the average American wage-earner's income is paid toward all those taxes (and maybe others I didn't think of.)


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