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On PBS, Jamie Dimon described the Buffett Rule as a good idea to reduce US debt.
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It says wealthier households should not pay taxes on a smaller share of income than middle-class households.
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He argued that if the US followed suit, it could continue spending and reduce debt at the same time.
Jamie Dimon, CEO of JPMorgan, has proposed a solution to America’s rampant debt: tax the wealthy at the same rate as middle-class people, or at a higher rate.
The bank executive told PBS News Hour in August that the country could rein in runaway lending without eliminating spending. Dimon said he expects reducing debt while still investing in the right initiatives to be “doable.”
“I would spend the money that helps make the country a better country, so some of this is infrastructure, tax credits for earned income, military,” he said. “I would have a competitive national tax system, and then I would maximize growth.”
Dimon added, “And then you have a little deficit, and you might just raise taxes a little bit — like Warren Buffett’s rule, that’s what I would do.”
This rule states that no household earning more than $1 million per year must pay taxes on a lower share of its income than the middle class. It gets its name from billionaire investor Warren Buffett, who famously criticized the fact that his secretary paid a higher tax rate than him.
Calls for wealthier Americans to pay higher taxes have grown louder in the past year as economists have sought answers to the federal government’s soaring debt burden.
Concerns have grown as government debt has risen to a record $35 trillion. The Congressional Budget Office has projected that this could represent 6% of US GDP by the end of this year, which would be well above the 50-year average of 3.7%.
If debt remains unchecked amid high interest rates, the government will face higher borrowing costs. Some say this could increase debt levels and ultimately push the US into bankruptcy.
Otherwise, higher financing costs will leave Washington with less to spend on social initiatives. A recent report from the Peter G. Peterson Foundation notes that the Congressional Budget Office has estimated that interest payments on the debt by 2054 will triple Washington’s historic spending on research and development, infrastructure and education.
Dimon is among the most consistent voices on Wall Street to sound the alarm, regularly saying runaway lending will exacerbate inflation and interest rate pressures over the next decade.
Not everyone shares Dimon’s optimism that tax increases alone can solve this problem. While some commentators have pushed for tax increase proposals that are inclusive of all income levels, others have urged both Democrats and Republicans to also consider spending cuts.
However, speaking to PBS, Dimon argued that the US should continue to spend money that helps maintain economic strength and create a more equitable income environment.
This article was originally published in August 2024.
Read the original article on Business Insider
