• On PBS, Jamie Dimon described the Buffett rule as a good idea for clamping down on US debt.

• He argues that wealthier households should not pay taxes on a lower share of income than middle-class households.

• He argued that if the United States followed this path, it could continue spending while reducing its debt.

JPMorgan CEO Jamie Dimon has proposed a solution to America’s spiraling debt: tax the rich at the same rate as the middle class, or at a higher rate.

The bank manager said: “PBS News Hour” in August, that the country could clamp down on rampant borrowing without eliminating spending. Dimon said he expects that reducing debt while continuing to invest in the right initiatives would be “doable.”

“I would spend the money that helps make the country a better country, so some of that money goes to infrastructure, to income tax credits, to the military,” he said. “I would have a competitive national tax system, and then I would maximize growth.”

Dimon added: “And then you’ll have a little deficit, and maybe you’ll raise taxes a little bit – like the Warren Buffett type rule, I would do that.”

This ruler posits that no household earning more than $1 million a year should pay taxes on a lower share of their income than middle-class earners. It is named after billionaire investor Warren Buffett, who criticized the fact that his secretary paid a higher tax rate than him.

Calls for wealthier Americans to pay higher taxes have grown over the past year as economists searched for answers to these questions. the growing debt of the federal government.

Anxiety has increased as government debt has grown. bloated to a record $35 trillion. The Congressional Budget Office has projected that it could compensate 6% of US GDP by the end of this yearwhich would far exceed the 50-year average of 3.7%.

If debt remains uncontrolled amid high interest rates, the government will face higher borrowing costs. Some say it could compound debt levels and that the The United States could end up falling into default.

Otherwise, higher borrowing costs mean Washington will have less to spend on social initiatives. A recent report from Peter G. Peterson Foundation pointed out that the Congressional Budget Office has estimated that by 2054, interest payments on the debt will triple Washington’s historic spending on research and development, infrastructure and education.

Dimon has been one of Wall Street’s most consistent voices sounding the alarm, saying frequently Uncontrolled borrowing will amplify pressures on inflation and interest rates over the coming decade.

Not everyone shares Dimon’s optimism that tax hikes alone can solve this problem. Although some commentators have insisted tax increase proposals that encompass all income levels, others have urged Democrats and Republicans to also consider spending cuts.

However, speaking to PBS, Dimon argued that the United States should continue to spend money that helps maintain its economic strength and create a more equitable revenue environment.

This article was originally published in August 2024.

Read the original article on Business Insider