The U.S. last month saw its national debt surpass a record $35 trillion for the first time, stoking economists’ fears that the nation is heading toward unsustainable spending deficit. Jamie Dimon, CEO of JPMorgan Chase (JPM), says he has a solution, taking a page from Warren Buffett. The banking executive recently told PBS that it would be “doable” to increase spending and spur growth across the nation while simultaneously bringing the debt down. “I would spend the money that helped make [the U.S.] a better country, so some of it is infrastructure, earned income tax credits, military,” said Dimon during an Aug. 14 interview. “I would have a competitive international tax system, and then I would maximize growth.”
Dimon has long reiterated his belief that increased spending across areas like the restructuring of global supply chains, boosted military expenditures and green economy transitions is urgently needed. Earned income tax credits, which benefit lower-income workers, should become more accessible to allow families to spend funds “the way they think it should be spent without government interference,” he told PBS.
To combat a subsequent deficit following such investments, Dimon suggests embracing a tax rule named after Buffett that ups taxes for higher-income families. “You would maybe just raise taxes a bit, like the Warren Buffett-type of rule,” Dimon said.
What is the “Buffett Rule?”
The so-called “Buffett Rule” posits that no households earning more than $1 million per year should pay a smaller share of their income in taxes than middle-class families. The tax rule first gained traction in 2011 when Buffett criticized the fact that his employees—including his secretary, Debbie Bosanek—were paying higher tax rates than himself, who currently has an estimated net worth of $139 billion. It was included in a proposed tax plan in 2011 that would apply a minimum tax rate of 30 percent on millionaires but failed to gain the support of Congress.
Buffett’s comments brought widespread attention to the disproportionate tax burden on those who earn wages, which are subject to income, payroll and federal taxes, compared to the tax benefits granted to investment income benefitting the ultra-wealthy.
This isn’t the first time that Dimon has warned about the nation’s growing debt problem. “I think Americans should be quite aware that we have got to focus on our fiscal deficit issues a little bit more,” he told the U.K.’s Sky News in May, noting that the debt could worsen inflation. “At one point, it will cause a problem, and why should you wait?”
Despite his cautionary messages, Dimon said he remains largely optimistic about the nation’s economic future—a sentiment he shares with Buffett. The duo often discuss their admiration of U.S. towns, universities, businesses and governments, according to the CEO. “When Warren Buffett talks about the great resilience of America, I believe that,” he told PBS.
