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The chief executive of Wall Street’s biggest bank thinks the US tax code could use a major overhaul.
In his annual letter to shareholders published Wednesday, JPMorgan CEO Jamie Dimon said the country is bogged down by selfishness, self-interest, and sluggish bureaucracy. He specifically called out corporate tax loopholes that he says should have been eliminated long ago.
“Then there’s our tax code – buried in it are an extraordinary number of loopholes, credits and exemptions that aren’t about competitiveness or good tax policy,” Dimon said. “Private equity, venture capital and real estate still get carried interest, and sugar and cotton, for some unknown reason, still get government subsidies.”
Carried interest is the part of a private equity firm’s or investment fund’s profits that it uses to pay fund managers. The carried-interest loophole treats that money as capital gains rather than income, meaning it’s taxed at a much lower rate.
Loopholes in the tax code ultimately end up stymieing competition, according to Dimon.
“Suffice it to say, industry gets its share of tax breaks and forms of protection from legitimate competition,” he said.
Dimon called on lawmakers to create a “proper and consistent tax and fiscal policy” that would drive growth and improve income inequality. The government should have a fiscal policy that’s simple and transparent, and one which allows it to collect all taxes owed, Dimon said. The federal government should also set a target for the amount it aims to collect in taxes over time, he said.
Dimon recommended raising taxes on the high earners and getting rid of a “maze” of unnecessary tax breaks that primarily benefit the wealthy. Tax breaks for race cars, private jets, and horse racing, along with a land conservation tax break for golf courses, should all be eliminated, Dimon said.
Democrats and Republicans should set aside partisanship to address what he considers the country’s public policy failures, Dimon said.
“We must remember that the concepts of free enterprise, rugged individualism and entrepreneurship are not incompatible with meaningful safety nets and the desire to lift up our disadvantaged citizens,” he said.
Dimon’s comments come as President Joe Biden pitches raising the corporate tax rate from 21% to 28% to finance a sweeping $2 trillion infrastructure package that would address an array of issues from electric-vehicle charging to high-speed internet access.
The Business Roundtable, a consortium of CEOs of major US firms, decried the proposed tax hike as creating “new barriers to job creation and economic growth.” But some large corporations — including Amazon and Lyft — have begun to voice their support.
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Originally published at https://www.businessinsider.com/jpmorgan-ceo-letter-corporate-tax-loopholes-reform-biden-infrastructure-plan-2021-4 on .