President Trump has asked house speaker Mike Johnson to include a tax increase on rich Americans in the vast tax package that legislators compile, according to two people familiar with the request, an idea that many Republicans have concluded.
Mr. Trump wants to make a new top income for people who earn more than $ 2.5 million a year, the people said, and to tax income above that level with a rate of 39.6 percent. The president brought the idea to Mr Johnson in a call on Wednesday, one of the people said.
Such a change would reverse one of the tax cuts that Mr Trump signed in 2017 as law The tax cuts and job law. That measure reduced the income earned in the upper bracket to 37 percent of 39.6 percent. This year the top income bracket starts at $ 626,350 for a person. Mr. Trump effectively tries to restore the previous top percentage, but at a much higher income level.
Mr. Trump has been flirting for weeks with a kind of tax increase on the rich, alarming Republicans who like to reduce taxes as a general issue. Conservatives have lobbying aggressively against the idea and last month Mr Trump stated that a so -called millionaire tax would be ‘very disruptive’.
But Republicans are at the same time confronted with difficult political and budgetary calculations They struggle to complete in tax legislation. To compensate for the enormous costs of the tax cuts they want to include – much of it by continuing the cutbacks of 2017 – Republicans are preparing for reducing the expenditure for Medicaid, a health care program for the poor.
The optics to reduce benefits for the poor to cover the costs of tax reductions that offer their biggest benefits to the rich, has worried about the Republicans who support hope class support. A person who is familiar with Mr. Trump’s thinking said that the president believed that a tax increase of the rich would help protect the Medicaid.
Republicans are considering other tax increases with a populist taste, including levying a tax on stock buying and further limiting the skills of companies to deduct the compensation for well -paid employees. Mr Trump also wants a termination of tax benefits with which private equity and hedge fund managers can pay a lower rate for a large part of their income.
Mr. Trump’s revival of the possibility of increasing income tax on the rich, just like Republicans in the house, the first design of their tax assessment will be released. They are already trying to find out how they can solve other open problems, including Medicaid cuts, as well as the state and local tax deduction, which some Republicans have demanded, are being expanded.
Senator Michael Crapo, a Republican from Idaho who leads the financial committee, was wary of the idea of levying taxes on the rich.
“So now I am not enthusiastic about the proposal,” he said in an interview with the conservative commentator Hugh Hewitt. “But I have to say that there are a number of people in both the house and the Senate who are, and if the president weighs in favor, then that is a big factor that we also have to take into account.”
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