Jamie Dimon is the CEO of JP Morgan Chase and apparently doesn’t know his own tax rate:
“Most of us wage earners are paying 39.6 percent in taxes and add in another 12 percent in New York state and city taxes and we’re paying 50 percent of our income in taxes,” Dimon said in defense of his fellow Wall Street bankers.
Of course the top marginal tax rate now is 35%, not 39.6, but maybe he’s simply confusing the rate he paid in the ’90’s with today. No big deal, right? Yet it kind of puts a silly spin on this whole argument about letting the Bush-era tax cuts expire for the wealthy, no? Matt Yglesias explains the behavioral conundrum:
The entire debate in congress over taxes is that President Obama wants to restore the top marginal rate to the level that Dimon thinks it already is. Meanwhile, Dimon doesn’t even know what tax rate he pays. Just saying.
I actually completely understand his ignorance of what tax rate he pays. Indeed, like a lot of us he probably has an accountant file his taxes for him. No big deal, right? Except not only does Dimon not know his top marginal tax rate, he doesn’t seem to understand the concept of a top marginal tax rate. A top marginal rate of 35% would only apply to income over $250,000 dollars. You don’t just simply add up all the tax rates that apply to you and come up with your total tax rate.
This seems to me to be one of the most basic concepts about how our tax system works, something that escapes a CEO of a major bank who decides he’s knowledgable enough to comment on American tax policy. This may be peanuts in the grand scheme of things but it underscores a point I’ve been thinking lately, which is that I don’t understand this assumption on the part of some people that businesspeople (CEO’s in particular) are inherently competent on macroeconomic issues and public policy. For if Mr. Dimon is a representative example, then I can’t help but think that such assumptive trust is sorely misplaced.