JPMorgan CEO Jamie Dimon approves of raising taxes on the wealthy and says it won't slow economic growth
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Jamie Dimon told CNBC on Wednesday he's not against higher taxes on the wealthy, and that it would not slow down economic growth. The JPMorgan CEO said there should be "far more" thought about taxation if the US wants an active, healthy, growing economy. "And I remind people, the world, when you slow down the economy, you are hurting the disadvantaged more than anybody else," Dimon added.
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Jamie Dimon told CNBC on Wednesday he's not against higher taxes on the wealthy and that it wouldn't slow economic growth. "There are taxes which will slow down growth, like taxes on capital formation or labor, and there are taxes which will not affect growth, like taxes on, you know, well-to-do people like me," the JPMorgan CEO said. He added that there should be "far more" thought about taxation if people want to plan an active, healthy, growing economy. Taxing the income of the wealthy as opposed to implementing a wealth tax is preferable, he said. "I'm not against having higher tax on the wealthy," he said. "But I think that you do that through their income as opposed to, you know, calculate wealth which becomes extremely complicated, legalistic, bureaucratic, regulatory, and people find a million ways around it. I would just tax income." Read more: Buy these 15 stocks right now before they rally higher, says the Morgan Stanley equity chief who nailed his call for a short-term market meltdown Dimon also said that who wins the presidential election will not affect the economy within the next year. President Trump's administration did "some very good things" for the economy including tax reform and regulatory reform, he said. Democrats "spend more money" and that's "usually good for [the] economy, at least in the short run." The CEO said that governments should spend more time trying to address how they are going to achieve a healthy and growing economy and not "confuse that with politics." "And I remind people, the world, when you slow down the economy, you are hurting the disadvantaged more than anybody else," Dimon added.Join the conversation about this story » NOW WATCH: We tested a machine that brews beer at the push of a button
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'I love depreciation': How big companies use Trump-like maneuvers to play the tax code in their favor
Summary List Placement The New York Times published a report on Sunday evening detailing the most...Summary List Placement The New York Times published a report on Sunday evening detailing the most information we've received to date regarding President Donald Trump's tax returns. Reporters Russ Buettner, Susanne Craig, and Mike McIntire wrote that Trump had "paid no income taxes at all in 10 of the previous 15 years — largely because he reported losing much more money than he made," and added that Trump paid $750 in taxes in 2017 and in the year he won the presidency. Trump tweeted Monday morning, "I paid many millions of dollars in taxes but was entitled, like everyone else, to depreciation & tax credits." While it seems like a sleight of hand to reduce a tax bill to next to nothing, it's entirely legal for businesses to utilize items such as net operating losses, accelerated depreciation, and tax credits to reduce their tax liability. A company can report a net operating loss if their deductions exceed their taxable income. This operating loss can be carried forward to future tax years to reduce taxable income, and thus tax liability. Before the 2018 implementation of the Tax Cuts and Jobs Act (TCJA), businesses were allowed to carry net operating losses forward for 20 years and backward two. For tax years beginning January 1, 2018, or later, there's an indefinite carryforward period for net operating losses; however, they're limited to 80% of each subsequent year's net income and the two-year carryback provision has been removed, except for certain farming losses. For losses that originated in tax years beginning prior to January 1, 2018, the former tax rules apply. The Trump Organization comprises around 500 business entities ranging from real estate to golf courses, hotels, and resorts, among other ventures. According to The New York Times, in 1995, Trump reported a $916 million net operating loss, and Trump golf courses have reported losses exceeding $315 million since 2000. In both instances, he could use the losses to reduce his tax liability in future years. In addition to net operating losses, during a 2016 presidential debate, Trump was quoted saying, "I love depreciation," an accounting method used to allocate the cost of assets over their useful life. By recording a decrease in the value of an asset, the depreciation reduces the amount of taxes a business pays. The larger the depreciation expense, the lower the taxable income, resulting in a lower tax bill. As Trump's companies include large depreciable assets in the form of real estate and commercial properties, he understands the value of depreciation and its impacts on taxes. While many find Trump's use of tax law controversial, it's not illegal. Tax avoidance is a common strategy among businesses who take legal advantage of the tax code to reduce or eliminate their tax liability. It's apparent Trump has benefited, but he's not the only business to do so. Amazon paid virtually no US federal income tax in 2017 and 2018 as a result of tax perks related to the distribution of billions of dollars of stock options to executives and key employees. Netflix also paid practically no US federal income tax in 2018 as a result of tax credits primarily attributed to changes laid out in the Tax Cuts and Jobs Act. In fact, a 2019 in-depth analysis from the Institute on Taxation and Economic Policy reported that 60 Fortune 500 companies avoided paying federal income tax for the 2018 tax year as a result of the new law. The report included household names such as Delta Air Lines, General Motors, Whirlpool, and IBM. When analyzing how The Trump Organization's treatment of tax loss carryforward and depreciation compares with their direct competitors, such as Starwood Capital Group LLC and Rockefeller Group International, Inc., it's hard to say. As they're private companies, they're not required to publicly disclose their financial statements. Steven Rosenthal, a senior fellow with the Urban-Brookings Tax Policy Center, told Bloomberg in 2019 that "The real estate industry is notorious for throwing off lots of deductions, and real estate developers are notorious for paying very few taxes." In his 2019 divorce proceedings, for example, it became public knowledge that real estate developer and owner of Macklowe Properties Harry Macklowe hasn't paid income tax since the 1980s. During Tuesday evening's presidential debate, when asked if he paid $750 in federal income taxes for the 2016 and 2017 tax years, Trump responded, "I paid millions of dollars in taxes, millions of dollars of income tax." Democratic presidential nominee Joe Biden replied with, "Show us your tax returns." While not legally required to release his tax returns, he would be the first president in almost 50 years not to make them available. Trump has said he'll release his returns once he's done being audited, even though an audit does not restrict him from doing so. When addressing the amount of taxes he paid in 2016 and 2017, Trump said, "It was the tax laws. I don't want to pay tax. Before I came here, I was a private developer. I was a private business people. Like every other private person, unless they're stupid, they go through the laws, and that's what it is."SEE ALSO: There's a way to gift your family members millions when you sell your startup, tax free Join the conversation about this story » NOW WATCH: What happens to animals during wildfires
Jamie Dimon tells shareholders he expects the coronavirus to cause a 'bad recession' and 'financial stress similar to the global financial crisis,' at a minimum (JPM)
Jamie Dimon's annual letter to JPMorgan shareholders was published Monday. In it, the bank's CEO addressed...Jamie Dimon's annual letter to JPMorgan shareholders was published Monday. In it, the bank's CEO addressed the coronavirus pandemic and the impact it could have on the US economy and JPMorgan. The bank has stopped buybacks but has not asked for regulatory relief, Dimon said. Watch JPMorgan trade live on Markets Insider. Read more on Business Insider. In his annual letter to JPMorgan shareholders, published Monday, CEO Jamie Dimon said that while the bank is strong, it won't be untouched by the fallout from the coronavirus pandemic. The pandemic will be damaging to the US economy, Dimon said. "At a minimum, we assume that it will include a bad recession combined with some kind of financial stress similar to the global financial crisis of 2008," he said. "Our bank cannot be immune to the effects of this kind of stress," he added. The US is grappling with the economic consequences of the pandemic, which has roiled global markets and shut down much of the country in an attempt to curb the spread of the disease. Most firms agree that the US is either already in a recession or will soon be in one, marked by massive slowdowns in output and an elevated unemployment rate — in the past two weeks alone, 10 million Americans have filed for unemployment benefits as coronavirus layoffs persist. Read more: 14 Wall Street experts told us the single metric they're each watching to assess coronavirus market fallout — and give their portfolios a leg up In response to the crisis, JPMorgan has stopped buying back its own stock, Dimon said, adding that halting buybacks "was simply a very prudent action." Dimon also said the board would consider suspending the bank's dividend only in "an extremely adverse scenario" that would include a 35% contraction of gross domestic product in the second quarter and an unemployment rate of 14%. "If the Board suspended the dividend, it would be out of extreme prudence and based upon continued uncertainty over what the next few years will bring," Dimon wrote. Still, Dimon said that the bank's capital resources and liquidity remained strong and that JPMorgan is lending or plans to lend an additional $150 billion for client needs. Read more: GOLDMAN SACHS: These 13 cheap stocks are poised for years of better-than-expected profits — and they're must-haves as the coronavirus wipes out earnings in 2020 JPMorgan is "working closely with all levels of government during this crisis" but has not asked for any regulatory relief, Dimon said. But he said that the financial system needed an overhaul when the crisis subsides. Next, there needs to be a solid plan to "carefully" return Americans to work, with precautions that include testing, Dimon said. "The country was not adequately prepared for this pandemic — however, we can and should be more prepared for what comes next," he wrote. "Done right, a disciplined transition would maximize the health of Americans and minimize the time, extent and suffering caused by the economic downturn." Dimon briefly thanked people who wished him well after his emergency heart surgery in March, but he didn't give any further updates on his health. Read more: 'Still too high': Goldman's global equity chief lays out 4 reasons why the stock market will melt down further before it fully captures the coronavirus crisisJoin the conversation about this story » NOW WATCH: A big-money investor in juggernauts like Facebook and Netflix breaks down the '3rd wave' firms that are leading the next round of tech disruption
JPMorgan is the biggest bank in the US and a bellwether for the global financial system....JPMorgan is the biggest bank in the US and a bellwether for the global financial system. So when it comes to the bank's most senior leaders, and particularly those in position to replace CEO Jamie Dimon, Wall Street pays attention. Wall Street is paying even closer attention to who might succeed Dimon after JPMorgan said on Thursday that he underwent emergency heart surgery. Dimon is currently recuperating after the operation. Business Insider last year identified the lender's 70 or so most important executives. We compiled the list by speaking with current and former employees, competitors, and recruiters, focusing our search on the operating committee and an executive cohort one level down at JPMorgan's four business units. We decided to avoid most staff members in the control or corporate functions, aside from a few key people. A JPMorgan spokesman declined to comment for the project. At the top is Dimon, who's been the CEO or chairman of the firm since January 2006, roughly 18 months after his Chicago lender, Bank One, was purchased by JPMorgan Chase. Dimon enjoys a reputation as the best banker, or among the best bankers, of his generation — and, as Roger Lowenstein wrote in The New York Times Magazine in 2010, the "least hated." When asked about his eventual retirement, Dimon has said he'd like to work for another five years or so. The comment became a running joke among Wall Street analysts, investors, and even JPMorgan execs. But Dimon is approaching the typical retirement age, and there's been talk that his "another five years" might actually be counting down. Last year, JPMorgan moved its longtime chief financial officer and potential-successor shortlist member Marianne Lake to a job running consumer lending. The credit-card chief Jennifer Piepszak took Lake's role as CFO. The moves were widely interpreted as being part of succession planning, with some wondering if this meant Lake was out of the running or just getting needed operating experience, or if Piepszak was now the favored one. Gordon Smith and Daniel Pinto, two executives who report to Dimon, will lead the bank while he recuperates. Smith had some wise words in late May on how he thinks about the bank's broader leadership team, in the context of all the focus on Dimon's replacement. "It's very obvious and understandable why Jamie's succession is what gets the vast majority of the ink," he said at an investor conference that month. "But what we all worry about is — yes, the CEO, but who are the 15 people or so, plus or minus, that will be on the operating committee of the firm that will steer it for the next decade, the decades following Jamie's rolling five [years until retirement]? What will be that group of people?" This list gives you the inside track on identifying that group. Note that the chart is interactive, so you'll need to click through on "direct reports" to get the full list of names. Have more information about the organizational structure or something else at JPMorgan? Contact the reporter by phone, email at firstname.lastname@example.org, or encrypted chat with Signal.SEE ALSO: JPMorgan just handed its CFO a new role and it could be a sign she's a candidate to replace Jamie Dimon DON'T MISS: These are the 30 most powerful people in Bank of America Merrill Lynch's $8 billion bond-trading division Join the conversation about this story » NOW WATCH: WeWork went from a $47 billion valuation to a failed IPO. Here's how the company makes money.