The White House is making a last-ditch push to raise taxes on the wealthiest Americans as part of President Trump’s “big beautiful bill,” as Republican lawmakers craft the final details of the tax package.
The proposal, according to three sources, would allow the top marginal income tax rate cut that Trump signed into law in 2017 to expire at the end of the year for the highest-income Americans — meaning that rate would rise from 37 percent to 39.6 percent — while Republicans would extend the 2017 tax cuts for the lower tax brackets.
One of the sources said the president had made the policy request as recently as Wednesday. Punchbowl News reported Thursday that Trump asked Speaker Mike Johnson (R-La.) directly to back the policy. Johnson did not respond to a question from The Hill about the tax rate when he left the Capitol on Thursday.
Republicans had previously said the option of a new millionaires tax was on the table as they crafted the new bill, shocking and prompting swift pushback from many conservatives who had advocated for decades to make refusing to raise taxes part of party orthodoxy.
While the top tax bracket for 2024 applied to incomes over $609,351 for single filers and $731,201 for joint filers, the White House is pitching a new higher rate would apply to those with incomes over $2.5 million for single filers or $5 million for joint filers, according to one source with knowledge of the pitch. Punchbowl News first reported those figures.
“The President is considering allowing the rate on individuals making $2.5 million or more to revert from 37% to the pre-2017 39.6%. This will help pay for massive middle and working-class tax cuts, and protect Medicaid,” a source familiar with the President’s thinking said.
House Republicans are scrambling to put the finishing touches on their Trump agenda bill, which will include an extension of the 2017 tax cuts, energy policy, immigration provisions and a debt limit hike, and major reforms to Medicaid.
A spokesperson for the House Ways and Means Committee, whose Republicans members met on Thursday to go over final details for the tax portion of the bill, declined to comment on any policy specifics under consideration. The panel is expected to mark up the tax portion of the bill on Tuesday. A White House spokesperson did not immediately return a request for comment.
The inclusion of any tax hike in the GOP’s megabill would be a massive reversal for House Republican leadership, which indicated in recent weeks that the prospect was off the table. Last month, Johnson said “I would not expect that” when asked about hiking up the top tax rate.
“We have been working against that idea. I’m not in favor of raising the tax rates because that’s, our party is the group that stands against that, traditionally,” Johnson said on Fox News during an interview.
But Trump has kept the door open to such an increase throughout the process. Asked about the prospect during an interview with Time Magazine last month, the president said “I certainly don’t mind having a tax increase,” but expressed some apprehension to the idea for political reasons.
“I actually love the concept, but I don’t want it to be used against me politically, because I’ve seen people lose elections for less, especially with the fake news,” he said.
On the other hand, a tax rate increase for the richest Americans has the potential to help Republicans attempt to neutralize arguments from Democrats that they are cutting assistance programs like Medicaid and the Supplemental Nutrition Assistance Program (SNAP) to pay for tax cuts for the rich.
But it is far from clear that the White House could get enough Republicans to green light that idea. Renewed rumors of the tax rate increase prompted swift pushback from outside tax-cut advocates.
“It is unbelievable that House Republicans are seriously considering raising taxes on anyone, and at the same time refusing to eliminate the trillions of dollars in waste from Joe Biden’s Green New Scam,” Americans for Prosperity Chief Government Affairs Officer Brent Gardner said in a statement on Thursday.
Grover Norquist, president of Americans for Tax Reform, said on X on Wednesday that his group – famous for having politicians sign pledges to not raise taxes — “opposes any effort to increase income tax rates on individuals or businesses,” adding that “Trump ran on making all the tax rates reductions permanent.”
David McIntosh, President, Club for Growth, said in a statement: “Scaling back the size and scope of the $4 trillion tax cut will help the Democrats raise taxes. This is not a serious option, and it is political suicide. We think this is bad policy and bad politics. If Republicans increase taxes, they almost certainly will lose the House and Democrats will start the impeachment process all over again.”
House GOP leaders are facing hangups as they try to appease all corners of the ideologically diverse conference to advance the legislation.
Hardline conservatives, for example, are calling for the package to be deficit neutral, and pushing for Medicaid changes to make that happen, while moderates are wary of significant reforms to the social safety net program. Centrist Republicans in high-tax blue states are also adamant about increasing the state and local tax (SALT) deduction cap.
But chatter about increasing taxes for the highest earners drew praise from one deficit hawk. Rep. Chip Roy (R-Texas), a member of the conservative House Freedom Caucus, called the idea “smart.”
“I believe all taxes should be lower & that government should be smaller. But, b/c Republicans have only delivered on the former, @realDonaldTrump is SMART to put NET TAX DECREASES with a possible higher top rate on the table IF & ONLY IF we are seriously reforming Medicaid,” he wrote on X.
Brett Samuels and Alex Gangitano contributed.
