Trump ‘pushing for tax rise on the rich'

Yahoo

08-05-2025

Donald Trump is reportedly pushing to increase taxes on the rich.
The US president privately urged House speaker Mike Johnson to raise the top rate of tax and close the carried interest tax loophole, according to Punchbowl News.
Speculation has mounted in recent weeks that Mr Trump will raise taxes on the wealthy to help pay down the national debt and support working class voters.
'I actually love the concept,' Mr Trump recently told Time magazine, when asked about a proposal apparently circulating among his inner circle to raise taxes for those earning more than $1 million a year.
Although he added: 'I don't want it to be used against me politically, because I've seen people lose elections for less, especially with the fake news.'
The apparent call between Mr Trump and Mr Johnson takes place as the Republican-controlled House aims to pass a Reconciliation Bill that would extend Mr Trump's 2017 Tax Cuts and Jobs Act.
The act applies to businesses and individuals, while eliminating taxes on tip income, overtime pay and Social Security benefits.
Republicans are aiming to complete Mr Trump's 'one big beautiful bill' by late next week and pass it in the House ahead of the May 26 US Memorial Day holiday.
The president is pushing to raise the top tax rate from 37 per cent to 39.6 per cent for individuals earning $2.5 million and higher or joint filers earning $5 million, with carve-outs for small businesses, an insider told Reuters.
'They've been talking about this for weeks,' one source said.
It comes after Mr Trump's imposition of sweeping tariffs on American trading partners led to a sell-off in the dollar and US government bonds, suggesting global markets were losing faith in American assets.
With the Federal Reserve facing the need to refinance $7 trillion of debt this year alone, a wealth tax has been mooted as a way to bring more cash into the Treasury.
The prospect of a tax hike on the wealthy will likely be met with a frosty reception from Republicans on Capitol Hill, who have long campaigned for lower taxes and opposed Joe Biden's plans to raise the top capital gains tax rate to 39.6 per cent.
The top rate of income tax in the US is set at 37 per cent, while capital gains is paid at an effective rate of around 24 per cent.
Mr Johnson and other top Republicans have resisted the idea of increasing the tax rate on wealthy Americans up until now. Meanwhile, Scott Bessent, the Treasury Secretary, told reporters last week that Mr Trump had ruled out the idea.
However, the party has remained under pressure from Mr Trump's populist Maga supporters to limit tax breaks for wealthy individuals and businesses.
JD Vance, the vice-president, and Russell Vought, the budget director, are said to have expressed openness to the idea, according to The Washington Post.
Steve Bannon, Mr Trump's former chief strategist, has also repeatedly endorsed the proposal as a way to pay for sweeping tax cuts and neuter Democrat attacks on the Republicans as the party of the rich.
Representative Jason Smith, who chairs the tax-writing House Ways and Means committee, said in a recent interview that his panel could close tax loopholes that benefit the rich.
The proposed tax increase is said to go hand in hand with a proposal to scrap the 'carried interest loophole'.
The loophole offers favourable tax treatment for private equity, venture capital and hedge fund managers, meaning they pay a low rate of roughly 20 per cent tax on their profits.
Removing it risks a showdown between the Trump administration and Wall Street, which has previously pushed back against presidents floating the idea.
The president has sent mixed messages on the subject of a wealth tax, telling reporters last month that 'a lot of millionaires would leave the country' if he imposed a 'millionaire tax'.
'You lose a lot of money if you do that. And other countries that have done it have lost a lot of people. They lose their wealthy people. That would be bad because the wealthy people pay the tax,' he said.
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