Jamie DimonChip Somodevilla / Getty

  • Jamie Dimon says American companies need tax cuts to be
  • They don’t. If they did, they wouldn’t have so much
    cash to blow on executive compensation and financial

Jamie Dimon, the CEO of JPMorgan Chase — the biggest bank in
America — needs to stop gaslighting the entire country.

For quarter after quarter — just as he did on Tuesday — he has
joined with other CEOs of the Business Roundtable (which is
exactly what it sounds like) and insisted that the US tax system
is the single biggest disadvantage they face in the global

This is nonsense. CEOs like to point out that the corporate tax
rate in America is 35%, or “the highest statutory corporate
income tax rate among developed nations.”

But huge companies like Dimon’s JP Morgan don’t pay that rate. In
fact, from 2008 to 2015 JP Morgan paid an effective tax rate of
15.6% according to research from the Institute of Policy Studies (ISP),
a progressive think tank. Thirty-five percent isn’t the real
story here, and it’s not what’s stopping multi-national CEOs like
Dimon from killing it on the world stage.

Americans can sense this.
According to Pew Research 62%
of Americans don’t think
corporations pay their fair share. Gaslighting occurs when
one person manipulates another person into questioning their own
sanity. That’s what’s happening here.

Dimon and his fellow CEOs would have us believe that they would
do more if they paid less. Before you believe that, though,
consider what they do with the system they have.

Not only did JP Morgan pay a 15.6% tax rate from 2008-2015, but
also during that time the company took $22.2 billion in tax
subsidies from the government. That’s in the ISP report too.

From 2008-2016 the company laid off almost 27,000 people, during
that same period Dimon’s compensation hit over $27 million — a
39% pay raise. Now, to be fair, a lot of that compensation is in

On the other hand, to be fair, I should note that JP Morgan
bought back $37.8 billion in stock during that period, which had
to help Dimon and other executives at the company quite a bit.

What I’m saying here is, it’s not as if the company is stretched
for cash. It’s not as if JP Morgan’s US tax burden is making it
impossible for the company to do business around the world. If it
were, it could’ve taken some of that cash it used for buybacks —
essentially propping up its stock price for investors — and put
it somewhere else.

Now, I pick on Dimon even though a bunch of other companies are
doing this stuff.
A few weeks ago I pointed out
that current Secretary of State
Rex Tillerson played the same games when he was CEO of Exxon

From 2008-2016, when he was CEO of ExxonMobil, the company
paid a rate of 13.6%. It also fired a third of its workers around
the world. Meanwhile, it spent $146 billion on stock buybacks and
gave Tillerson a 22% pay raise over the period, ultimately paying
him $27.4 million in 2016. 

In fact, the ISP was able to find 92 public companies that pay a
20% tax rate because there are a lot of loopholes in the system
that allow them to do so.

“Our calculations have revealed that the 92 firms in our
sample had median job growth during this period of negative 0.74
percent, compared to the 6 percent job-growth rate of U.S.
private sector firms as a whole,” said the report. “The 48
tax-avoiding firms in our sample that cut jobs downsized by a
combined total of 483,000 positions.”

But Dimon is getting picked on today because he
is so
vocal about fixing America.
He likes to talk about policy and
the future and economic growth.

Some economists worry that CEOs like him aren’t putting
their money where their mouths are. Take, for example, a recent
survey of execs by  MIT- Boston Consulting
Group survey
. Almost 85% agreed that artificial intelligence
(AI) will give their companies an edge in the future.

However, less than 35% of them have any strategy in place
for how to use AI. That means they’re not investing in it,
they’re just kind of dreaming and wondering about it. Apparently,
there are competing investment interests and there’s pushback
from other parts of the business and concerns about security and
talent and so forth.

In short, it costs money and it’s risky. But isn’t managing
that correctly what the private sector is supposed to be rewarded

This is an issue that William Lazonick, an economics
professor at UMass Lowell, described
in his 2012 paper
, “The Financialization of the US
Corporation: What Has Been Lost, and How Can It Be

In it, he pointed out that 
private sector often calls on the government to invest in
innovation rather than using its own cash. Back in 2010
the American Energy
Innovation Council
 — which includes executives from
Microsoft, Bank of America, and other massive companies —
called on the government to increase its investment in
alternative energy from $5 billion to $16 billion

Of course, seven of the companies on the council had spent
$228 billion from 2000-2010 on stock buybacks. Combine what
Dimon’s worried with what corporate America actually uses its
cash for and, you’d think that stock buybacks equal
competitiveness. They don’t. They equal more compensation for

So no. America is not crazy. Corporations are doing just
fine. They do not desperately need tax relief. If they did, they
wouldn’t have cash lying around to pay themselves so richly. Stop
gaslighting, Jamie.

Get the latest JPM stock price here.