President Donald Trump is calling on Republican lawmakers to raise taxes on some of the wealthiest Americans as part of his new sweeping economic package, a move that US Commerce Secretary Howard Lutnick says he “supports.”
According to people familiar with the discussions, Trump is pushing to create a new 39.6 percent tax bracket for individuals earning at least $2.5 million a year or couples earning $5 million. The current top rate is 37 percent. If passed, the measure would restore the top rate to its pre-2017 level, effectively undoing a significant portion of President Trump’s own first-term tax cuts.
According to Bloomberg, Trump made his position known in a phone call with House Speaker Mike Johnson on Wednesday, where he also reiterated his support for eliminating the income tax break — a long-term benefit that private and venture capitalists argue is needed, according to one source.
Representative Jason Smith, a Missouri Republican and chairman of the House Tax Committee, is scheduled to meet with President Trump on Friday. A congressional aide said Smith plans to assure the president that the upcoming tax bill “will advance the president’s priorities.”
While the full outlines of the proposal are still under negotiation, it is not yet clear whether it would include expanding the existing small business income tax exemption under the individual income tax code.
The push to raise the top rate comes as House Republicans face mounting fiscal pressure to craft what President Trump has called “one big beautiful bill” — a multi-trillion-dollar package aimed at extending the 2017 tax cuts while enacting a series of new promises, including eliminating taxes on tips and overtime pay.
To fund the plan, Republican Party leaders have struggled to find consensus on cutting social security programs like Medicaid, prompting President Trump to propose alternatives. Despite concerns that taxing high earners could hurt Republicans politically or divert wealth overseas, President Trump has increasingly suggested that such a move may be necessary.
Raising taxes runs counter to long-standing Republican orthodoxy. Trump’s willingness to propose a tax hike for millionaires shows how much he has reshaped the Republican Party in his populist image. Top Republican leaders have balked at other proposals that would raise taxes on wealthy households. -Bloomberg
“Whenever the president asks for something, we consider it,” said Oklahoma House of Representatives Tax Committee member Kevin Hern. He confirmed that both the new cap and the elimination of the participation interest are “under discussion,” but stressed that “there is no agreement yet.”
The reaction in the Senate has been more moderate. Idaho Senator Mike Crapo, the top Republican on the Senate Finance Committee, told conservative talk show host Hugh Hewitt on Thursday that he was “not excited” about the tax increase, but acknowledged that “there are a number of people in both the House and the Senate who are.”
“If the president decides in favor of it,” Crapo added, “then that’s a big factor we have to take into account.”
As Republicans consider how to advance President Trump’s second-term tax ambitions, the question of who pays—and how much—will become a defining test of the president’s enduring influence over the party’s economic direction.
