One of President Donald Trump’s major promises made during his campaign is that he said he would vastly overhaul and simplify the nation’s tax code as well as providing tax cuts for the middle class (AND the upper class).
Tax code reform is crucial not just for putting more money in Americans’ pockets, but to allow them to know what their future earnings and savings will be. It also will allow businesses to anticipate expenses and labor costs; both of these are important for getting the nation’s economic engine running smoothly.
As Trump has already said about Obamacare, these undertakings are a lot more complex than they seem to be on the surface. In fact, Obamacare repeal and replacement may be just one reason why tax reform may not happen on the schedule that the Trump administration had originally projected.
Steve Mnuchin, Trump’s new Treasury Secretary, had initially said to the media that he was anticipating a timetable of somewhere around August for Congress to approve the tax reforms that Trump desires. However, that’s assuming that Congressional battles over the budget the administration is proposing to Congress get resolved in a forthright manner.
Even with Republican majorities in both houses of Congress, given Trump’s large requests to boost military spending (including eliminating the 2011 defense budget sequester), build a wall on the U.S.’s southern border and allocate a trillion dollars for fixing national infrastructure, it remains to be seen if a battle for the budget doesn’t turn into a knock-down, drag-out fight that could last months at a minimum.
It should be noted that past budget battles during the Obama and Bush administrations were so partisan and bitter that they led to government shutdowns on multiple occasions.
According to Jamie Dimon, CEO of bank behemoth JPMorganChase, Obamacare reform “will clearly delay tax [reform] and maybe make it harder to get something done. Best case: If Obamacare comes first, it’s going to take 12 months to do tax [revision].”
Other banking insiders on Wall Street agree with Dimon’s assessment. Of course, all of these bankers aren’t interested on behalf of the average American, but on behalf of their own corporations and profits. “America needs corporate tax reform,” claimed Dimon at a recent investor conference.
He tried to make the case that his desire wasn’t completely selfish. “It’s not hurting JPMorganChase; it’s hurting the average American — that’s why it should be done… Studies show lower taxes help wages flow to lower-paid Americans. It’s the flipside of unintended consequences.”
However, it was fairly obvious that Dimon was trying to reflect the media’s highlighting of the fact that his firm’s trading divisions had a perfect year in 2016 — their third in the last five years. A “perfect year” in this case means that Dimon’s bank didn’t lose money on a single day in 2016. In fact, on average, the bank made $80 million per trading day within this division alone.
Dimon is in a position to know about the Trump administration’s intentions — as well as financial realities. His bank is North America’s largest by nearly twice the size of his next competitor, Bank of America. Already this year, Dimon is the only Wall Street CEO to have visited the White House twice, at least once meeting with Gary Cohn, the director of the White House National Economic Council (WHNEC).
Dimon is also a good friend of Trump’s, and he originally desired Steve Mnuchin’s job, but was not recommended for it by Trump’s other Wall Street friend, investor Carl Icahn (Dimon had sent mixed signals to the press about wanting the role).
It should be said that neither Trump nor Icahn does much bank business with JPMorganChase for reasons that are less than clear, although it’s known that Icahn is wary of big banks’ prospects based on their risk-taking policies.
Nonetheless, Trump appointed Dimon to his exclusive 16-member presidential Strategic Policy Forum group that works with big business in December of last year.
Regardless of whether the tax code gets overhauled this year or next, Dimon isn’t hurting for money. Since Trump’s election, the CEOs of America’s six largest banks have seen their wealth grow by nearly $275 million. Nearly half of that amount is accounted for by Dimon alone, who saw his bank stock grow in value by $110 million, more than 20 percent of its total worth.
~ Liberty Planet