Jamie Dimon Backs Closing Carried Interest Loophole, Citing Social Gains and Bond Market Risks

JPMorgan Chase CEO Jamie Dimon publicly endorsed taxing carried interest, a favored tax loophole for private market investors. Speaking at the Reagan National Economic Forum, Dimon aligned with U.S. President Donald Trump’s recent push to close this provision, which allows fund managers to benefit from lower capital gains taxes rather than paying ordinary income tax rates.

Dimon Highlights Tax Revenue Use, Bond Market Risks, And Social Benefits From Reform

Dimon suggested that revenue generated from taxing carried interest—estimated to increase by $60 billion—could be used to double income tax credits, even for individuals without children. He emphasized that these funds would directly support communities, families, and housing, highlighting the broader social benefits of closing the tax loophole.

Dimon also raised concerns about a potential “crack in the bond market,” attributing risks to the U.S. government’s overspending and quantitative easing measures. Although such a market disruption could trigger panic, Dimon noted that financial institutions like JPMorgan might benefit from the increased volatility due to higher brokerage activity.

Market Instability, Rising Yields, And Tax Loophole Debates Challenge Economic Outlooks Ahead.

Dimon pointed to recent market instability linked to President Trump’s fluctuating trade policies and suggested tax cuts combined with a surge in government spending. These factors have caused treasury yields to rise sharply, prompting a temporary pause on tariffs. Dimon warned that the resulting debt trajectory and market behavior could create lasting challenges, with the bond market disruption potentially occurring anywhere between six months to six years.

The carried interest loophole allows private fund managers to pay taxes on profits as capital gains instead of ordinary income, resulting in lower tax rates. Efforts to close this loophole have bipartisan support and could generate substantial tax revenue. However, private equity and hedge fund groups argue that closing the loophole could harm small businesses and institutional investors. Industry opposition to recent attempts to reform this tax treatment remains strong.