JP Morgan CEO recommends Negative Tax at Davos
The 2017 World Economic Forum – WEF – being held at Davos Switzerland is where some of the world’s most influential figures meet to discuss the state of the world and, in particular, the economic concerns and opportunities that lie ahead. This year, Jamie Dimon CEO of JP Morgan offered his support for a negative tax – NT – as a means of raising the income of low wage earners.
A NT was promoted in the 1930’s by Premier ‘Bible Bill’ Aberhart in Alberta Canada and the 1950’s by Milton Freeman in the U.S. as a means of toping up a person’s income if it fell below a certain point. Of course, a NT is the poor cousin of a Basic Income since the NT only looks at last year’s income to determine the supplement to be granted this year. As a consequence, the added income a person required last year, does not arrive until a year later. Unfortunately, looking at last year’s earning will, invariably, be far too late to help, as well as being totally irrelevant to this year’s earnings in these uncertain times. A BI, on the other hand, is current, consistent and more realistically focused on the immediate needs of its recipients.
However, just the idea that the CEO of a major financial institution wants tax dollars to top up low wages also suggests willingness to pay the higher taxes that will be required to do so. For yet another WEF perspective from the Davos summit check out Scott Santens enlightening analysis of the numbers involved in implementing a Basic Income in the U.S.