President Donald Trump is urging Congress to raise taxes on the wealthiest Americans, including a new top tax bracket and eliminating longstanding breaks, as Republicans look for ways to fund sweeping economic reforms, Bloomberg reported.
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Trump’s proposal, discussed in a phone call Wednesday with House Speaker Mike Johnson, would create a 39.6% tax bracket for individuals earning at least $2.5 million annually or couples making $5 million, according to people familiar with the talks. That rate would restore the top marginal tax level to its pre-2017 level before Trump’s first-term cuts lowered it to 37%.
The president also reaffirmed his desire to eliminate the carried interest loophole used by private equity and venture capital fund managers. A preliminary estimate by the nonpartisan Tax Foundation indicates the millionaire bracket could raise $67.3 billion over a decade while eliminating the carried interest break could generate an additional $6.7 billion.
Rep. Jason Smith, R-Mo., the House Ways and Means Committee chair, is expected to meet with Trump on Friday. A congressional aide said Smith would assure the president that the emerging tax bill would align with his economic agenda.
The push for higher taxes on top earners marks a notable break from traditional GOP orthodoxy.
Trump’s proposal arrives as Republicans try to pass what he has called the “one big beautiful bill,” an expansive package to make his earlier tax cuts permanent and deliver on campaign promises, including tax relief for tips, overtime pay, and seniors.
Commerce Secretary Howard Lutnick told Bloomberg Television that higher taxes on the wealthy is a “smart” way to fund Trump's broader initiatives. “It frees up more money to pay for Trump’s campaign proposals to cut taxes for hospitality workers and seniors,” he said.
Still, the proposal has triggered friction within the party.
Some Republicans, particularly those aligned with more traditional fiscal conservatism, oppose any move to raise taxes, arguing it could harm job creation and party unity. Others, including populist conservatives and moderates, are open to selectively increasing levies to support middle- and working-class relief.
Sen. Mike Crapo, R-Idaho, chair of the Senate Finance Committee, expressed hesitation in a Thursday interview with conservative radio host Hugh Hewitt. “I’m not excited about it,” Crapo said of the proposal, “but there are a number of people in both the House and the Senate who are.”
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“If the president weighs in in favor of it, then that’s going to be a big factor that we have to take into consideration,” he added.
Meanwhile, the House Ways and Means Committee is scheduled to meet Tuesday afternoon to advance this portion of Trump’s economic plan.
The debate underscores deep divisions within the Republican Party as it grapples with how to finance Trump’s sweeping economic priorities without expanding deficits or cutting popular entitlement programs like Medicaid.
On the tax panel, Rep. Kevin Hern, R-Okla. confirmed that the higher rate and carried interest provisions are being discussed. “Anytime the president asks for something, we will consider it,” Hern said.