JPMorgan Chase CEO Jamie Dimon says he’s okay with companies using a hot tax dodge that could cost the U.S. tens of billions of dollars over the decade.
Dimon’s public thumbs up for inversions—the growing practice where American companies buy smaller foreign companies to relocate overseas and avoid paying U.S. taxes—came in response to a question from Fortune on a media conference call after JPMorgan (JPM) released its second quarter results. He said the real problem was the tax code, not CEOs trying to shirk their responsibilities.
“You want the choice to be able to go to Wal-Mart to get the lowest prices,” Dimon said on a conference call with reporters on Tuesday morning. “Companies should be able to make that choice as well.”
Dimon did not elaborate on the difference between choosing where to buy your underwear and where a corporations calls home. In a recent cover story for Fortune, Allan Sloan argued that U.S. companies are “positively unpatriotic” when they move their corporate headquarters overseas to pay lower taxes because of the benefits they receive by being (except for tax purposes) American companies. What’s more, Sloan argued undermining the U.S. tax base will be bad for all shareholders in the long run.
Dimon seemed to brush aside those concerns. He said it was inappropriate for anyone to moralize against deals in which U.S. companies seek lower tax rates through mergers. No large U.S. bank has proposed an inversion deal. Since the financial crisis, there has been a debate about the size of the subsidizes that large banks like JPMorgan receive from U.S. taxpayers.
At least for now, inversions are good for Dimon and his shareholders. The firm has been an advisor on 19 inversion deals that have been announced since last year. The bank is advising drug maker AbbVie (ABBV) on its $53 billion bid for Dublin-based Shire (SHPG), which was announced on Monday.
“I love America. I’m just as patriotic as anyone,” said Dimon. “But we have a flawed corporate tax code that is driving U.S. companies overseas.”