Jamie Dimon, the CEO of JP Morgan was vocal about the corporate tax reform in the US during the bank’s annual investor day. He insisted that it is the biggest priorities for Wall Street today, but he was sceptical that it will happen in near future.
The nation’s largest bank’s CEO said that the country needs these reforms not because it is hurting the bank, but because it is hurting the average American citizens. He said, “It is about capitalism. Lower taxes are not going to mean that businesses are going to have forever higher profits. It’s going to go somewhere. And though it sounds counter-intuitive, studies show that thing that is impacted the most from lower corporate tax rates will be wages.”
The market is waiting with bated breath for Trump’s maiden speech at the Congress to pick up clues on what his priority will be in the coming months. Many believe that Trump will give more weightage to other concerns like healthcare and border issues and tax reform will be low on priority. Even Dimon was of the opinion that if Trump made repealing Obamacare the top priority then tax reforms will be pushed back by at least a year.
Dimon, who is the member of Trump’s CEO strategic advisory panel, was the front-runner for the post of Treasury Secretary, but he turned down the position. He was speaking his mind out after the bank revealed on the occasion of annual investor day that in 2016 the average revenue made by its traders was $80 million a day. Not a single day in the year the bank made a loss, which makes 2016 the perfect trading year, a third such year since 2013.
The other prominent players on Wall Street like Goldman Sachs also echo the sentiments of Dimon. Its economists have already warned that markets are too optimistic about the tax reforms, while there is less probability that it will happen in this year. The statement of Trump’s top money man, Steve Mnuchin, the Treasury Secretary of the US, however, says that tax cuts will happen by August.
Dimon did not express his views on being asked if he thinks that the new administration has a good sounding board for business. He was however in tune with Trump’s ideology that the US economy has not grown less because of some slowdown in productivity. He believed that the policies and the political decisions were responsible for the slowdown of the US economy.