Trump Signals Openness To Higher Top Tax Rate On Millionaires

WASHINGTON — President Donald Trump is signaling openness to a higher top tax rate on millionaires as Republicans struggle to agree on Medicaid cuts that would help pay for an array of tax cuts.

Trump is “considering” allowing the top marginal tax rate to go up from 37% to 39.6%, where it was at the start of his first term, according to a source familiar with the president’s thinking. The higher rate would kick in on incomes above $2.5 million.

“This will help pay for massive middle and working-class tax cuts, and protect Medicaid,” the source told HuffPost.

The president suggested the tax increase during a conversation with House Speaker Mike Johnson (R-La.) earlier on Thursday, according to Punchbowl News.

Johnson has previously said on multiple occasions that he doesn’t love the idea of including a tax increase as part of the so-called “big, beautiful bill” that Republicans are hoping to send to the president’s desk this year.

“I’m not in favor of raising the tax rates because our party is the group that stands against that, traditionally,” Johnson said last month.

Steve Bannon, the MAGA populist podcaster who served as a White House adviser during Trump’s first term, has championed tax hikes on the rich as a way to undercut Democratic attacks that the Republican agenda is a tool of oligarchy.

Trump himself has seemingly waffled on the tax hike idea. He repeatedly spoke against it last month amid reports it was under consideration.

“I think it would be very disruptive because a lot of the millionaires would leave the country,” Trump said at the White House. “You lose a lot of money if you do that.”

In fact, a higher top marginal rate could bring in hundreds of billions of dollars, and Republicans need money. It would cost more than $4 trillion for Republicans to extend the household tax cuts they enacted in Trump’s first term. Those cuts, which included the reduction in the top marginal rate to 37%, were temporary and will expire at the end of this year if Congress doesn’t act. (The top rate currently kicks in on incomes above $600,000.) Republicans are also planning potentially trillions more in cuts based on the various promises Trump made on the campaign trail. They need lots of money.

Republicans had hoped to offset part of their tax agenda with $1.5 trillion in spending cuts, including as much as $880 billion in cuts to Medicaid, but some moderate House Republicans have said they won’t vote for such a steep cutback, and Trump has vowed to protect the program.

A handful of Republicans, including House Freedom Caucus chair Andy Harris (R-Md.), have said they support raising the top marginal rate.

Sen. Josh Hawley (R-Mo.) said Thursday it could be a good idea. “I think we need to focus our tax relief on working people,” Hawley said.

Asked how many of his colleagues would go along with the idea, Hawley said, “Zero … Maybe one or two.”