President Donald Trump reportedly wants to create a new tax bracket for Americans making seven figures a year. According to Punchbowl News, he privately tried to convince House Speaker Mike Johnson, R-La., to tax individuals making $2.5 million a year or couples making $5 million at 39.6%.
The renewal of President Trump’s 2017 Tax Cuts and Jobs Act would include the change.
The current highest tax rate is 37% for individuals making $626,350 or couples making $751,600.
Speaker Johnson has repeatedly said he opposes increased taxes on individuals.
What is President Trump saying publicly?
Publicly, President Trump is ambivalent about raising taxes on the highest earners. He wrote on Truth Social, “Republicans should probably not do it, but I’m OK if they do!!!”
“The problem with even a ‘TINY’ tax increase for the RICH, which I and all others would graciously accept in order to help the lower and middle income workers, is that the Radical Left Democrat Lunatics would go around screaming,‘Read my lips,’ the fabled Quote by George Bush the Elder that is said to have cost him the Election. NO, Ross Perot cost him the Election!” the president wrote.
What is the status of the tax bill?
House Republicans announced they want to approve the tax and budget package by Memorial Day. But they are already behind that schedule after cancelling multiple committee meetings.
The debate about individual tax rates comes as blue state Republicans pressure Johnson to increase the state and local tax deduction, or SALT. In 2017, lawmakers lowered the write-off from $25,000 to $10,000.
Supporters of the SALT deduction contend they are getting double-taxed and want the limit eliminated. Republicans who oppose the write-off contend it’s essentially a federal subsidy. They say high tax states should find a way to lower their taxes, not rely on a deduction for relief.
Leadership offered a $30,000 state and local deduction this week. New York Republicans swiftly rejected it.
New York Republicans said they would vote against the tax bill if SALT isn’t included, and they have a lot of leverage because the bill will fail without their support.
