The move would help offset the cost of sweeping tax cuts aimed at helping the middle and working class, while also protecting funding for Medicaid.
WASHINGTON—President Donald Trump is asking Republican leaders to raise taxes on millionaires to help fund major tax cuts, according to a source familiar with his thinking.
The president is considering restoring the top individual income tax rate for those earning $2.5 million or more from the current 37 percent back to the pre-2017 level of 39.6 percent, the person told The Epoch Times. The move would help offset the cost of sweeping tax cuts aimed at helping the middle and working class, while also protecting funding for Medicaid, the source said.
Separately, Reuters reported, citing anonymous sources, that Trump privately discussed the idea with House Speaker Mike Johnson during a phone call on Wednesday. In the same conversation, Trump also urged Johnson to close the carried interest loophole that benefits Wall Street.
Trump previously floated closing the loophole, but the idea has failed to gain traction among congressional Republicans. The loophole benefits wealthy money managers since they pay the lower 23.8 percent capital gains tax rate on income received as compensation, instead of the ordinary income tax rates of up to 40.8 percent, according to critics.
“We’re the Republican Party and we’re for tax reduction for everyone,” he added.
The 2017 tax cuts are set to expire at the end of 2025. Making those tax reductions permanent has been a central pledge of Trump’s 2024 campaign. To advance this agenda, Republicans plan to use the budget reconciliation process, which allows them to bypass the Senate filibuster and pass legislation with a simple majority vote.
However, the path forward is complicated. Fiscal conservatives have made clear they won’t support any reconciliation package that fails to meet strict spending cuts. With a narrow majority, Johnson can’t afford to lose any votes.
Trump also wants tax cuts for companies that manufacture in the United States, and to eliminate taxes on tips, overtime pay, and Social Security benefits.
Despite these priorities, Republican lawmakers remain divided over how to pay for them. Internal disagreements, including over Medicaid funding, threaten to stall the reconciliation process and complicate Trump’s tax agenda.
Trump remains optimistic.
“We are going to do NO TAX ON TIPS, NO TAX ON SENIORS’ SOCIAL SECURITY, NO TAX ON OVERTIME, and much more. It will be the biggest Tax Cut for Middle and Working Class Americans by far, and it is time for Main Street to WIN.”
