Jamie Dimon, JPMorgan Chase’s chief executive, has been out front among Wall Street chiefs in supporting higher tax rates on individual taxpayers as a way to avert the fiscal cliff.
In fact, Dimon has even said that he'd be willing to pay higher taxes on his own income, which was around $23 million last year alone. Add to that, the CEO is a member of Fix the Debt, a nonprofit group with the mission to promote ways to reduce the national debt.
Yet JPMorgan, the biggest bank in the country by assets, appears to be unwilling to sacrifice its own tax benefits to help bring down the national debt. Instead, it has spent millions this year alone lobbying Congress to extend a key loophole that allows the bank to avoid paying a tax bill on its foreign income.
The corporate tax break is known as the "active finance exception," and it allows multinational companies to earn interest on overseas lending and defer paying taxes to the U.S. government indefinitely.
When contacted by The Huffington Post, the bank did not comment directly on whether it is currently lobbying for this tax break. "We paid over $8 billion in taxes last year and operate as efficiently as we can for shareholders," said Mark Kornblau, a spokesman for the bank.
As recently as five months ago, JPMorgan Chase was funding lobbyists to push Congress to extend this key tax loophole. According to lobbying reports on OpenSecrets.org, JPMorgan Chase paid more than $3 million between April 1 and June 30 alone to lobbyists to specifically discuss "proposals to extend the active finance exception."
Last month, Morgan Stanley CEO James Gorman also came out in support of a "balanced solution" to the fiscal cliff, including support of tax hikes on individual taxpayers, even as his bank has also lobbied to extend the same tax break, HuffPost’s Ben Hallman reported.
Technically, the "active finance" exemption expired at the end of 2011, but Congress is expected to extend it once again at the urging of lobby groups. According to the Joint Committee on Taxation, the two-year cost of extending the tax break is an estimated $11.2 billion, Hallman reported.
In October, Dimon said he'd support raising the capital gains tax to 20 percent from the current rate of 15 percent and raising income tax rates for households earning more than $250,000 -- even if his own personal tax rate would be nearly 40 percent.
JPMorgan Chase and Morgan Stanley are only two of around two dozen companies that have lobbied Congress to extend the offshore tax loophole. The list includes mostly banks, but also counts among its members large U.S.-based multinational companies with financing arms, such as Ford Motor Co. and General Electric, according to tax groups.
This particular loophole has been called a giveaway by some policy groups, which have said it that allows companies that already pay artificially low tax rates to exploit another offshore tax loophole. It also encourages overseas lending at the expense of domestic lending, critics say.
Rebecca Wilkins, the senior counsel for federal tax policy at Citizens for Tax Justice, has noted that the size of this particular loophole is small compared the size of the federal budget -- one reason Congress may be willing to extend it.
BEFORE YOU GO
How to vote
Vote-by-mail ballot request deadline: Varies by state
For the Nov 3 election: States are making it easier for citizens to vote absentee by mail this year due to the coronavirus. Each state has its own rules for mail-in absentee voting. Visit your state election office website to find out if you can vote by mail.Get more informationTrack ballot status
In-person early voting dates: Varies by state
Sometimes circumstances make it hard or impossible for you to vote on Election Day. But your state may let you vote during a designated early voting period. You don't need an excuse to vote early. Visit your state election office website to find out whether they offer early voting.My Election Office
General Election: Nov 3, 2020
Polling hours on Election Day: Varies by state/localityMy Polling Place