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Trump Advocates for Tax Hike on Ultra-Wealthy in GOP Tax Overhaul

President Trump suggests raising the top tax rate to 39.6% for incomes over $2.5 million, creating divisions within the Republican Party as lawmakers finalize a sweeping tax and spending bill.

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U.S. Speaker of the House Mike Johnson (R-LA) speaks alongside President Donald Trump during a National Day of Prayer event in the Rose Garden at the White House on May 1, 2025 in Washington, DC. The National Day of Prayer is a congressionally recognized observance that calls on people of all faiths to participate in a day of prayer and reflection.
U.S. President Donald Trump shakes hands with Speaker of the House Mike Johnson in the East Room at the White House in Washington, U.S., February 5, 2025. REUTERS/Leah Millis/File Photo
U.S. President Donald Trump looks on as he signs executive orders and proclamations in the Oval Office at the White House, in Washington, D.C., U.S., May 5, 2025. REUTERS/Leah Millis/File Photo

Overview

  • President Trump has proposed increasing the top tax rate from 37% to 39.6% for individuals earning over $2.5 million and couples earning over $5 million annually.
  • The suggestion marks a notable departure from traditional Republican tax-cut policies and has exposed ideological rifts within the GOP.
  • Trump privately pressed House Speaker Mike Johnson to include the tax hike in the upcoming budget reconciliation package, which aims to extend Trump-era tax cuts and fund new priorities.
  • The tax increase is pitched as a way to finance middle- and working-class tax cuts and preserve Medicaid, but faces resistance from fiscal conservatives and pro-business Republicans.
  • House tax-writing committees are set to review the proposal next week as Republicans navigate narrow majorities and unified Democratic opposition.