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yesterday

Trump Pushes Wealth Tax to Resolve GOP Impasse on Tax Cuts

President Trump has urged raising taxes on millionaires and closing loopholes to fund middle-class tax cuts and Medicaid, deepening Republican divisions.

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
Mike Johnson and Donald Trump in the Rose Garden of the White House on May 1, 2025.

Overview

  • President Trump proposed a new 39.6% tax bracket for individuals earning over $2.5 million annually and closing the carried interest loophole to offset the cost of extending the 2017 tax cuts.
  • The House Ways and Means Committee is set to mark up the reconciliation bill next week, but internal GOP disagreements over funding strategies persist.
  • Traditional conservatives oppose tax increases, while some populist and moderate Republicans support the measures to protect Medicaid and fund middle-class benefits.
  • Republican leaders claim the 2017 tax cuts will pay for themselves through economic growth, but nonpartisan analysts estimate they added $1.9 trillion to the national debt.
  • The GOP faces a tight timeline to finalize the bill, with a goal of passing it in the House before Memorial Day, as lawmakers struggle to reconcile competing fiscal priorities.