Overview

• President Trump has proposed increasing the top individual income tax rate from 37% to 39.6% for Americans earning over $2.5 million annually.
• He also supports taxing carried interest as regular income, a move targeting private equity earnings, to fund middle-class tax relief and Medicaid protections.
• House Republicans are divided over Trump's proposals, with some opposing tax increases and others struggling to identify Medicaid savings to offset promised tax cuts.
• Democrats have criticized Republicans over potential Medicaid cuts, warning that such measures are politically unpopular and harmful to vulnerable populations.
• The proposals come as Congress faces a looming deadline to extend the 2017 Tax Cuts and Jobs Act, set to expire at the end of 2025, amidst rising federal deficits.