Jamie Dimon says the 'Buffett rule' approach to taxing the wealthy could solve America's debt problem

• Jamie Dimon cited the "Buffett rule" as a good idea for clamping down on US debt, he told PBS.
• The rule says million-dollar households should not pay a lower share of their income than middle-class families.

JPMorgan CEO Jamie Dimon has put forward a solution to unrestrained US debt: tax the rich at the same rate as middle-class people, or higher.

The bank executive told PBS News Hour that the country can clamp down on runaway borrowing without completely eliminating spending. In fact, Dimon expects that reducing the debt while still investing in the right initiatives is "doable."

"I would spend the money that helps make it a better country, so some of this is infrastructure, Earned Income Tax credits, military. I would have a competitive national tax system, and then I would maximize growth," he said.

Dimon continued: "And then you'll have a little bit of a deficit, and you would maybe just raise taxes a little bit — like the 'Warren Buffett' type of rule, I would do that."

This rule posits that no household making above $1 million a year should pay taxes on a lower share of their income than middle-class earners. The principle earned its name from billionaire investor Warren Buffett, who famously criticized the fact his secretary paid a higher tax rate than he did.

Calls for wealthier Americans to pay higher taxes have grown louder in the past year as economists search for answers to the federal government's skyrocketing debt.

Anxiety has grown as the government's debt pile has ballooned to a record $35 trillion. The Congressional Budget Office projects that it will likely make up 6% of US GDP by this year's end, far outpacing than the 50-year average of 3.7%.

If debt remains unchecked amid today's interest rate highs, the government will face higher borrowing costs. Some warn that this might compound debt levels, and US could eventually spiral into a default.

Otherwise, higher borrowing costs mean that Washington will have less to spend on social initiatives. According to a recent report from the Peter G. Peterson Foundation, by 2054, interest payments on the debt will triple Washington's historical spending on research and development, infrastructure, and education.

Dimon has been among Wall Street's most consistent voices to raise the alarm, frequently citing that runaway borrowing will only amplify inflation and interest rate pressures through the coming decade.

Not everyone shares Dimon's optimism that tax hikes alone can solve this problem. Though commentators have pushed for tax hike proposals that embrace all income levels, others also urge both Democrats and Republicans to consider spending cuts, as well.

However, speaking with PBS, Dimon emphasized that the US should continue to spend money that helps maintain its economic strength and creates a more equitable income environment.