As the debate over the future of the Tax Cuts and Jobs Act (TCJA) intensifies, an unexpected question has emerged. Are Republicans in Congress seriously considering raising taxes on millionaires to help pay for Trump’s next round of tax cuts?
Recent remarks from President Donald Trump and some of his advisors have shifted this idea from the political fringe to a real topic of discussion.
According to several press reports, Trump is pushing to increase the top income tax rate from 37% to 39.6% for individuals earning over $2.5 million and joint filers making more than $5 million, while also advocating for eliminating the carried interest loophole.
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However, Trump has also acknowledged that the approach remains fraught with risks.
In a recent interview with TIME magazine, Trump was asked about the possibility of increasing taxes on Americans earning over $1 million a year.
“I actually love the concept, but I don’t want it to be used against me politically, because I’ve seen people lose elections for less, particularly with the fake news,” Trump replied.
Trump added that he “certainly doesn’t mind having a tax increase” on the wealthy, and said he’d be “honored to pay more” if it meant providing relief for the middle class.
A primary concern seems to be the political risk involved. On that note, Trump pointed to former President George H.W. Bush.
In 1988, Bush campaigned on the memorable promise, “Read my lips: no new taxes.” However, Bush ultimately agreed to a bipartisan budget deal in 1990 that included tax increases, breaking his campaign pledge.
So, what about now? Are Trump and GOP lawmakers planning to raise taxes on high earners?
'I love the concept': Trump millionaire tax coming soon?
Trump’s openness to raising taxes on the wealthy has sparked debate within the GOP.
Traditional conservatives and anti-tax groups, like Americans for Tax Reform, led by Grover Norquist, are pushing back hard against the idea. Norquist reportedly told reporters, “it ain’t happening” and warned such a tax hike could split the party and alienate its core base.
According to The Hill, Norquist and his group are mobilizing to block any move toward a millionaire’s tax, reminding Republicans of their long-standing pledges against tax hikes.
Speaker of the House of Representatives Mike Johnson (R-L.a.) has echoed the skepticism surrounding the proposal, saying the party “traditionally stands against” raising tax rates.
Still, some within the party see some political advantage in considering higher taxes for millionaires.
Supporters of that approach argue that even a modest increase on incomes above $1 million could generate substantial revenue, which could help fund larger tax cuts for the middle and working class.
For instance, Republican Rep. Dan Meuser of Pennsylvania has suggested that raising the top tax bracket to 38.6% could help fulfill Trump’s pledge to prioritize working Americans.
Figures like former Trump advisor Steve Bannon have publicly backed the idea, framing it as a way to show that Republicans are serious about tax fairness and make it harder for Democrats to claim the GOP is only looking out for the rich.
Meanwhile, Trump warns that a sudden tax hike could prompt wealthy individuals to move their money abroad, potentially reducing government revenue. Yet, he keeps the idea of higher taxes in play, suggesting it could fulfill his promise to help working Americans as long as it doesn’t cost him politically.
And not that long ago, when asked about potential tax changes for the wealthiest Americans, U.S. Treasury Secretary Scott Bessent told reporters, "We're going to see where the president is on the issue. Everything's on the table."
What tax increase options are being considered by GOP lawmakers?
Behind the scenes, a few possibilities are reportedly under consideration:
- Restoring the Pre-TCJA Top Tax Rate: One idea is to allow the top marginal tax rate to increase from 37% to 39.6% for those earning over $1 million, which would happen automatically if the 2017 TCJA tax cuts expire. Some Republican lawmakers and advisors see this as generating new revenue without creating a new tax structure. Estimates suggest that restoring the 39.6% rate for millionaires could raise tens of billions over a decade.
- Adding a New Tax Bracket: Another option is to introduce a higher tax bracket specifically for ultra-high earners. For example, House Republicans have floated setting a 40% tax rate on annual income above $1 million, which would be a new threshold above the restored pre-TCJA rate. Analyses from the Budget Lab at Yale and the Tax Foundation estimate that such a bracket could generate between $358 billion and $420 billion over ten years.
- Limiting Deductions: Lawmakers could cap certain deductions or phase out tax breaks for the wealthiest households. Those changes wouldn’t raise the top marginal rate directly, but would increase the effective tax rate on high earners by reducing the tax benefits available to them. Such reforms are seen by some as less politically risky than headline rate hikes.
However, those potential proposals face an uphill battle. Many Republicans have pledged never to raise taxes, and with slim majorities in Congress, even a few defections could derail any bill that includes a tax hike on the wealthy.
GOP tax increase? What's next
Despite strong resistance from some corners of the party, Trump’s own words and ongoing conversations among GOP lawmakers suggest a so-called “millionaire’s tax” could be "on the table."
Alongside Trump’s headline promises to eliminate taxes on overtime pay, tips, and Social Security benefits, and to make the 2017 tax cuts permanent, Republicans must also contend with a host of looming tax issues as the TCJA expiration approaches.
- If Congress fails to act, individual tax rates will rise, the standard deduction will shrink, and the child tax credit will be reduced, meaning higher tax bills for many families.
- Key business provisions like the 20% pass-through deduction and bonus depreciation are also set to expire, potentially raising taxes and compliance burdens for small businesses.
- At the same time, the GOP is navigating Trump’s sweeping new tariffs, which will raise consumer prices and complicate the economic outlook.
So, the longstanding assumption that Republicans would never raise taxes on the wealthy is no longer a sure thing.
And this is all happening as multiple recent polls show that Donald Trump’s approval rating at the 100-day mark of his presidency was historically low. Most surveys placed his approval between 39% and 45%, and disapproval around 55%
The outcome will depend on political calculations and whether Trump and the Republican-led Congress decide that the potential reward outweighs the risk.
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