JPMorgan CEO Says Rich Should Pay 'Lion's Share' Of Taxes, Warns of Dodd-Frank's Effect
WASHINGTON (By Dave Clarke) - The wealthy should pay the largest portion of U.S. taxes, JPMorgan Chase Chief Executive Jamie Dimon said on Tuesday, injecting himself into the budget debate as the threat of a government shutdown looms.
Dimon, who also backed getting government spending under control, spoke as Republicans and Democrats failed to reach agreement during White House talks aimed at forging a budget deal that would keep the U.S. government operating beyond Friday.
On Tuesday, House Republicans also unveiled a plan for tackling long-term budget shortfalls that focuses on slashing spending including what goes to Medicare and Medicaid.
"I for one have no problem, as a well-off American... paying taxes," Dimon told the annual spring meeting of the Council of Institutional Investors.
"I think those well off should pay a lion's share, I have no problem with that," he said. "But I think we can't just go on endlessly spending money."
Dimon singled out education spending as an area where budget cutters should be careful when wielding their knives as he bemoaned the lack of opportunities for lower-income students.
He also warned that if the United States does not fix its budget problems soon investors in government debt will force budget cuts in the future by refusing to buy U.S. securities.
"If we are not voluntarily fiscally responsible, we will be involuntarily fiscally responsible," he said.
In a wide ranging talk with meeting attendees, Dimon also said new international bank capital standards are excessive and may impede economic growth.
"It will stifle economic growth and I already believe it is," he said.
The new Basel III rules being phased in over several years from 2013 will roughly triple to 7 percent the minimum core capital a bank must hold to withstand shocks and spare taxpayers from footing the bill in the next financial crisis.
Large internationally active banks, known as "SIFIs," will also likely have to hold an additional amount of capital to better prepare them for another global shock.
"I think banks around the world are already deleveraging getting ready for the potential impact of Basel III global SIFI charges," he said.
In his remarks on Tuesday, Dimon also warned of the anti-competitive effects of the Dodd-Frank Wall Street reform law.
He said new rules being developed for the roughly $600 trillion over-the-counter derivatives market could drive business oversees. He voiced similar criticisms of the derivatives rules last week at a U.S. Chamber of Commerce event. (Reporting by Dave Clarke; Editing by Tim Dobbyn)
Copyright 2011 Thomson Reuters. Click for Restrictions.