Overview

• President Trump urged Speaker Mike Johnson to support raising the top individual tax rate from 37% to 39.6% for incomes above $2.5 million to finance middle-class tax cuts and safeguard Medicaid funding.
• The proposal includes treating carried interest as regular income, targeting private equity managers, and is part of broader Republican efforts to extend the 2017 Tax Cuts and Jobs Act.
• Trump's push has deepened fractures within the GOP, with traditional conservatives opposing tax hikes and populist-leaning members expressing conditional support.
• Congressional Republicans face tight deadlines to reconcile tax cuts, spending reductions, and revenue offsets in their sweeping reconciliation bill.
• The House Ways & Means Committee is set to review the tax portion of the bill next week, as GOP leaders grapple with resistance from fiscal hawks and party hardliners.