Latest news with #TrumpTax
Telegraph
26-05-2025
- Business
- Telegraph
Trump goes to war with the wealthy to shore up Maga base
Donald Trump has never been a likely Robin Hood figure. But even a billionaire US president knows he needs to work on his image sometimes. After promising tax cuts on the campaign trail, Trump now claims he wants to raise taxes on the rich. 'People would love to do it – rich people. I would love to do it, frankly,' he told reporters in the Oval Office earlier this month. 'What you're doing is you're giving up something up top in order to make people in the middle-income and the lower-income brackets save more. So it's really a redistribution, and I'm willing to do it if they want.' Lawmakers have reportedly been discussing a range of different ways to target America's highest earners, with measures that could rake in an extra $400bn (£300bn) over a decade. In doing so, Trump is trampling on the bedrock of traditional Republican ideology and causing uproar in the Grand Old Party. But as Republicans prepare their 'big, beautiful bill' for tax and spending, which includes $880bn in cuts to public health insurance for poor households, Trump needs to find ways to take care of his low-income Maga support base. The bill was passed on Thursday by the House of Representatives and will now go to the Senate, but it is still possible that it could be subject to changes. Trump's Oval Office comments followed a Truth Social post in which he said he would 'graciously accept' a tax increase on the rich, but added: 'In any event, Republicans should probably not do it, but I'm OK if they do!!!' It was not his first hint. 'I love that, I actually love the concept,' Trump said during an interview with Time magazine at the end of April, when he was asked about raising taxes on millionaires. 'He's trying to be populist,' says William Gale, co-director of the Tax Policy Centre and a former senior economist on President George HW Bush's council of economic advisers. Adam Michel, the director of tax policy studies at the Cato Institute, says: 'I think Trump has people around him who are not Republicans and who think that the class warfare message that Democrats have run on in the past is a winning one, and some of that has bled through into his thinking.' The archetype non-typical Republican in Trump World was once Steve Bannon, Trump's former chief strategist. While he is no longer on the inside, he has been pushing the idea of taxes on the wealthy in a sign of the kind of thinking filtering through Maga land. Bannon said earlier this month: 'I believe that if we can't cut federal spending that the wealthy in this country, at least the millionaires, are [taxed at] 40pc, as a start. 'We have a capitalist system with very few capitalists. I think 75pc of people don't own any real financial assets. So we have to have fundamental change in this country and part of that has to come from the tax structure.' Reports suggest that three options could be on the table. On a call with House Speaker Mike Johnson, Trump discussed the possibility of letting his 2017 tax cuts expire for the highest earners, according to CNN. During his first term, Trump cut the top tax rate, which is currently charged on individual income exceeding $626,350 (or on income above $751,600 for married couples), from 39.6pc to 37pc. If this rate reverted to 39.6pc, it would affect 1.5m households and mean $409bn in extra tax revenues over a decade, according to the Tax Foundation. Households in America pay state taxes on top of the federal tax rates. In high tax states such as California and New York, top rate tax payers would face a marginal rate of more than 50pc. The second idea, which has been discussed by members of the Ways and Means Committee, is to create a new top tax bracket for those earning $2.5m or more, with a rate of 39.6pc. The Tax Foundation calculates that this would hit up to 200,000 households and raise nearly $70bn over 10 years. Another alternative, which Fox News reported White House aides were quietly floating among House Republicans, is to raise the income tax rate for people earning more than $1m to 40pc. The Tax Foundation calculates this would raise $275bn over a decade. 'It seems there is a contingent within the White House that just likes higher taxes, whether they be on individuals or on traded goods,' says Michel. While the numbers involved may sound appealing, in every case the Tax Foundation warned that overall income would be significantly reduced because the tax rise would hit growth. Still, Trump may well be more concerned about what he could lose if he does not at least talk about soaking the rich. Several pollsters have warned that Republicans could lose support from the Maga base as a result of the Medicaid cuts within Trump's Budget. In April, top Trump campaign pollster McLaughlin & Associates found that 78pc of Trump supporters in battleground congressional districts supported the Medicaid programme. It followed similar polling by Tony Fabrizio, another Trump polling guru, who found that the majority of Trump voters opposed Medicaid cuts and two thirds of swing voters said they disapproved of reductions in the health programme to fund tax cuts. However, the instinct to raise taxes on the wealthy to help protect the Maga base stands in stark contrast to the bedrock of Republican ideology, which is to push for lower taxes. 'Tax cuts are the one thing that unites the Republican Party,' says Gale. The vast majority of Republican lawmakers in both the Senate and the House have signed what is known as 'the Pledge' – a commitment organised by old-time Republican activist Grover Norquist to never vote for tax rises. Norquist told The Atlantic a tax rise on the rich was 'an incredibly destructive idea economically, and very foolish politically', But the old guard does not necessarily have its finger on the pulse. Many of the votes that carried the party to victory in 2024 were not for the Republicans but for Trump alone. 'We're changed the electorate in the Republican Party. We are a working-class and a middle-class party,' Bannon said this month. It was the Democrats' failure to grasp the importance of fundamental economic issues that pushed so many lower-income Americans towards Trump, Bannon argues. The president forgets this at his peril, he believes. 'They want to cut $880bn out of Medicaid, but you can't do it because Maga is on Medicaid,' Bannon said. As things stand, wealthy families will rake in cash from tax and spending changes in the pipeline while low-income families are going to lose money. There are three key parts to the 'big, beautiful bill'. The first is the extension of the sweeping tax cuts that Trump introduced in 2017, which are due to expire at the end of this year. The second element is a fleet of extra tax cuts that Trump promised on the campaign trail, such as scrapping taxes on tips and overtime. The third is a series of spending cuts to try and balance the books. Even though many lower and middle class households will technically benefit from some of the tax cuts, the loss of health insurance coverage means the poorest fifth will lose about $940 in 2026, according to the Penn Wharton Budget Model. Meanwhile, the top 10pc highest income households will get 65pc of the benefits from the legislation. As well as helping to even the scales when it comes to who benefits, taxing the rich would also help to balance the books. Although the spending cuts are dramatic, they are nowhere near large enough to cover the cost of the tax cuts. The bill currently envisions $4.5 trillion in net tax cuts over the next decade, but only $1.5 trillion in spending cuts, says James Knightley, chief international economist at ING. This matters because the public finances are already a mess. America has a debt problem. Moody's last week stripped the US of its last triple-A credit rating as it warned that Trump's plans to extend his 2017 tax cuts will add $4 trillion to the US federal deficit over the next decade. It was the last of the big three credit rating agencies to downgrade America. US federal government debt is forecast to balloon from 98pc of GDP to 134pc by 2035. As a result, investors are growing increasingly nervous about the sustainability of US borrowing. Yields on 30-year US Treasuries surpassed 5pc on Wednesday after the passage of the existing bill as investors demanded higher rates for debt that they now view as more risky. A tax raid on the rich to balance the budget might help to ease those jitters. However, for all Trump's Robin Hood talk, he may struggle to make the policy happen. Tax is an area where Trump cannot resort to executive order. The bill is now progressing to the Senate. If any changes are made they will have to be signed off by the House of Representatives again, where Republicans have only a slim majority. Strong-arming this majority into backing something that goes against a central tenent of old-school ideology may be a stretch. 'Trump has always surprised me in his ability to get Republicans to lay down and take things that they're never believed before,' says Michel. 'So I don't want to say that he wouldn't be able to do it. But I think that it would be a really big lift.'
Telegraph
09-05-2025
- Business
- Telegraph
Republicans push back on Trump's ‘plan to up tax on rich'
Donald Trump 's apparent plans to impose a wealth tax have been met with resistance from Senate Republicans. The US president on Wednesday is said to have privately urged House speaker Mike Johnson to raise the top rate of tax and close the carried interest tax loophole, Punchbowl News revealed. On Friday, Mr Trump posted on Truth Social that he would 'graciously' accept such a measure 'in order to help the lower and middle-income workers'. 'In any event, Republicans should probably not do it, but I'm OK if they do,' he added. The proposal has faced pushback from leading Republicans on the Hill, with senate majority leader John Thune saying that the party is 'all about lowering taxes'. 'I don't want to see taxes go up on anyone ... but the president, he's not a conventional president. People didn't vote for a conventional president, and I think his policies reflect that,' Mr Thune told CNBC. 'This all starts in the House of Representatives, they're going to have to figure out how to dial this.' Speculation has mounted in recent weeks that the president will levy taxes on the wealthy to help pay down the national debt while retaining the support of working class voters. Under the proposal, Mr Trump allegedly floated the idea to Mr Johnson of raising the top rate of tax for those earning $2.5 million a year or more to 39.6 per cent, up from 37 per cent. The president added fuel to the fire on Friday by writing on Truth Social that he would 'graciously accept' a ''TINY' tax increase for the RICH', while also warning of potential attacks from Democrats. He added that Republicans should 'probably not do it' but that he would be 'OK' if they did. 'It's good politics' Later on Friday, he told reporters he thought it was 'good politics' to raise taxes on the wealthy 'to benefit people who are lower income'. The proposal comes as Republicans assemble a spending package that includes massive tax and spending cuts. Budgeting for the bill faces increased scrutiny with the government facing the prospect of refinancing $7 trillion in debt later this year. Despite pushback from traditional Republicans, the proposed wealth tax has gained support among his Maga base, with JD Vance, the vice-president, and Russell Vought, the budget director, reportedly expressing openness to the idea. Grover Norquist, the president of Americans for Tax Reform, said he informed Mr Trump on Wednesday that the proposal is likely to result in discontent among Republicans. 'I gave him my sense of why I thought any discussion of increasing rates was a bad idea: because it would kill jobs, it is damaging to small businesses, nobody in the campaign ever discussed this as an option,' Mr Norquist told NBC. 'The other part is, the entire Republican Party is against it.'
Washington Post
09-05-2025
- Politics
- Washington Post
Friday briefing: Pope Leo XIV; Trump budget bill; Jeanine Pirro; India and Pakistan; El Salvador travel; and more
Leo XIV became the first American pope. Trump told Congress to raise taxes on the rich in a budget bill. Trump named Fox News host Jeanine Pirro as interim U.S. attorney for D.C. India and Pakistan remain on the brink of a major military confrontation. El Salvador wants America's prisoners — and its tourists.
Fox News
28-04-2025
- Politics
- Fox News
Buckle Up, There's More To Come
As President Trump approaches his 100th day in office, this week's events will highlight the Trump administration's early agenda wins while providing insight into their priorities to come. Republican strategist and co-founder of South and Hill Strategies, Colin Reed, and National Reporter and Columnist for the Washington Examiner, Salena Zito, discuss President Trump's accomplishments, recap his early executive orders, and break down the challenges he'll face going forward. They also highlight the President's fast action on border security and efforts to extend the Trump Tax cuts. I Wish Someone Had Told Me: Colin and Salena note what is on the horizon for President Trump's next 100 days. Learn more about your ad choices. Visit
Yahoo
26-02-2025
- Business
- Yahoo
Senate confirms top Trump trade negotiator
The Senate voted to confirm a trade attorney and first-term Trump official for the position of America's top trade negotiator as the Trump administration looks set to reconsider long-standing relationships with many traditional U.S. trading partners. The Senate voted on Wednesday by a margin of 56 to 43 to confirm Jamieson Greer as the U.S. Trade Representative (USTR). The vote was largely along party lines, with Republicans generally voting for Greer and Democrats voting against him. Sen. John Fetterman (D-Penn.) was among the Democrats who voted in favor of Greer. Greer, a former lawyer for the Air Force who worked as chief of staff to Trump's first Trade Representative, Robert Lighthizer, will work alongside Commerce Secretary Howard Lutnick to manage Trump's trade policy, which has already flustered allies and led to massive pile ups of shipments at U.S. ports of entry. Republicans have spoken highly of Greer, including Senate Finance Committee member Chuck Grassley (Iowa), a self-described free-trader who expressed interest in gaining new market access, a traditional interest of the free trade agenda. 'I am confident that Mr. Greer will pursue an aggressive trade strategy that includes opening access to new markets through new trade deals. I also believe that Mr. Greer will work to level the playing field for U.S. farmers to compete with Brazil fairly, and deal with China head-on,' he said in a Tuesday statement. Meanwhile, Democrats blasted the confirmation, calling Greer a rubber stamp for Trump. 'Mr. Greer will be a rubber stamp for the Trump Tax, the knee-jerk decision to slap tariffs on nearly everything Americans buy and make high prices even higher,' Sen. Ron Wyden (Ore.), ranking Democrat on the Senate Finance Committee, said in a Wednesday statement. 'Greer has embraced Trump's chaos strategy, which is a slap in the face to farmers, manufacturers and communities across the country.' Trump's trade agenda has begun in fits and starts, with the president pledging large-scale across-the-board tariffs on certain countries and then pulling them at the last minute. Trump said he would impose tariffs on Canada and Mexico on his first day in office, then pushed the deadline back to February, then again to March after various calls and discussions with leaders of the two countries. Trump said Monday that tariffs on imports from Canada and Mexico are still 'on time and on schedule' as the countries increase border security ahead of a March 4 deadline. A 10-percent tariff on China was imposed on February 1. China blasted the tariff and retaliated by imposing a 15-percent additional tariff on U.S. coal, lignite, liquified natural gas, coke and anthracite. China also imposed a 10-percent tariff on U.S. tractors and farm machinery, semi-trailers and crude oil. Trump's temporary cancellation of a tariff exemption known as the 'de minimis' rule that allows shipment worth less than $800 to enter the U.S. without being taxed or inspected led to a backlog of a million packages at JFK airport. Trump canceled the rule change a few days later after meeting with a FedEx direct. Experts estimate that an additional 22,000 customers officers would be needed to inspect packages at the border if the de minimis rule is canceled on a permanent basis. Copyright 2025 Nexstar Media, Inc. All rights reserved. This material may not be published, broadcast, rewritten, or redistributed.
