Thursday, December 8, 2011

Catch of the Day

Ooh, this is a good one. JP Morgan Chase CEO Jamie Dimon was complaining about anti-Wall Street rhetoric and how much he already pays in taxes...but Matt Yglesias was listening carefully and noted that Dimon claimed to be paying "39.6 in taxes." Oops! Yglesias (my emphasis):
The thing about this is that the actual top marginal income tax rate is 35 percent. 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.
 A couple of things. One is that Dimon was talking about federal taxes, not just federal income taxes, so the payroll tax has to be figured in...but presumably at his income level, that's not going to matter much, since it's gone for most of his income (as are the lower marginal rates that most of us pay on our incomes, which cut the other way for him, for whatever that's worth). And rates on some kinds of income are lower than that top marginal rate. And as Ezra Klein points out, that's before his accountant gets involved. So even if the top rate was what Dimon thinks he's paying, he wouldn't actually be paying that much.

By the way, I'd guess that hardly any people who pay income tax actually know what percentage of their income they pay in taxes, and of course we've seen that there are tons of people who don't even realize they don't pay income tax at all (but do pay payroll taxes). I have no idea whether people in Dimon's cohort even have a good sense of how much money they actually make in a year -- their salaries, sure, they know that, but the rest? I sure wouldn't. All of which is fine, until the start trying to influence public policy based on mistaken notions of their own situation. That, I'd say, isn't apt to produce good results.

And: great catch!


  1. Actually, doesn't TurboTax tell you what your effective tax rate is every year, both state and federal? I don't remember mine from last year (it seemed pretty reasonable), but I am pretty sure that that final report does say.

  2. Dimon's no exception to the norm. In this poll ( from 22 months ago, a large majority of people did not know that their taxes had gone down under the Obama administration. 1/2 thought they hadn't changed and 1/4 thought they'd gone up. Most people have no clue, which is why Fox is still in business.

  3. See, Jon, you and Yglesias just can't say that he doesn't pay that much in federal taxes. Maybe he drives an M1 Abrams tank, getting 0.6 miles to the gallon, and therefore, pays a ton of federal gasoline taxes. I happen to think that he's also a sugar importer, and he's paying those import duties, and just mislabeling them taxes.

  4. Anonymous, I strongly doubt that Jamie Dimon uses TurboTax to calculate his taxes . . .

    This COTD is significant not just because it exposes the fact that a right wing blowhard doesn't know what he's talking about (what else is new?) but because it shows how ridiculous it is for conservatives to claim that changes of a few percentage points in the maximum tax rate are going to have a massive impact on incentives to work. If the average executive doesn't even know what rate he is paying, how is a change in that rate supposed to sour him on going to the office on Monday morning?

  5. "By the way, I'd guess that hardly any people who pay income tax actually know what percentage of their income they pay in taxes, . . ."

    That was what I was responding to, Weber. Too obvious to make the connection, or so I thought.


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