JPMorgan Chase Chairman and CEO Jamie Dimon testifies during a US House Financial Services Committee hearing on Capitol Hill in Washington, DC, June 19, 2012, about JPMorgan Chase’s trading loss.
JPMorgan Chase CEO Jamie Dimon and Citigroup chief Jane Fraser on Thursday expressed concerns over President Joe Biden’s effort to hike the amount of taxes businesses pay on foreign profits and a concurrent goal to set a global minimum corporate tax rate.
Testifying before the House Financial Services Committee, Dimon argued that a plan to raise the U.S. tax rate on foreign profits to 21% could, over time, push firms to move business overseas. Dimon thinks that shift could accelerate if allies renege on their promises to impose a similar global minimum tax rate.
“America would be the only country, I think, in the world that would have what we call a global tax rate,” he said, referring to the proposed 21% rate on U.S. companies’ foreign income.
“There’s no question in my mind that, at the margin … that will drive capital and, eventually, brains and R&D and investment overseas,” he said. “And that would be a mistake for America.”
Fraser, Citigroup’s new CEO, concurred, adding that “it’s very hard to get other countries to sign on to an equivalent program despite some optimism.”
“I think that will be extremely difficult,” she continued. “And, therefore, it could put the U.S. in a position of being less competitive around the world.”
The commentary from two of the nation’s top bankers came as the Biden administration continued to seek international support for a global minimum corporate tax rate of 15%.