President Trump all but rejected a proposal floating around among congressional Republicans to jack up taxes on millionaires to pay for his “big, beautiful” agenda package.
Over recent weeks, some Republicans had dangled the possibility of establishing a 40% rate on taxpayer earnings over $1 million a year. Currently, the top tax rate is 37% for annual income over $609,351.
“I think it would be very disruptive because a lot of the millionaires would leave the country,” Trump, 78, told reporters in the Oval Office on Wednesday.
“In the old days, they left states. They’d go from one state to the other. Now, with transportation so quick and so easy, they leave countries. You’d lose a lot of money if you do that.”
Previously, Trump, 78, privately said that he was open to the idea.
Republicans had also splintered on it, with House Speaker Mike Johnson (R-La.) admitting that he’s “not a big fan” of it, while others, such as House Freedom Caucus Chairman Andy Harris (R-Md.) expressed openness to it.
Such a tax would generate about $400 billion over a decade, according to two estimates seen by Bloomberg News.
Republicans are grappling with a tricky arithmetic problem in trying to fund the sweeping “big, beautiful” agenda package they are pursuing that includes tax cuts, enhanced border security, beefed-up defense spending, revved-up energy supply and more.
Between the House and Senate, Republicans are eyeing somewhere between $4.5 trillion and $5.8 trillion worth of tax cuts and spending increases — for border security and defense — over a 10-year stretch.
On the House side, Republicans are looking at a minimum of $1.5 trillion in spending cuts over 10 years.
Fiscal hawks have been leery about legislation that could balloon the deficit, while moderates have been warning that deep cuts to social spending are a dealbreaker.
Last fiscal year, the US had a $1.8 trillion deficit.
About 61% of the roughly $6.75 trillion federal budget is mandatory spending, such as Medicare, Social Security and Medicaid. Another 13% is interest on the debt.
Some populist factions of the MAGA base have been calling for tax increases on the wealthy to make the math work on the Trump agenda package.
Earlier this month, for example, Trump ally Steve Bannon assured “Real Time with Bill Maher” that “Trump and the MAGA movement will raise taxes on the wealthy.”
Still, GOP leaders have downplayed the possibility of such a tax.
“I would not expect that,” Johnson told Fox News’ “The Will Cain Show” on Wednesday. “We have been working against that idea. I’m not in favor of raising the tax rates, because that’s — our party is the group that stands against that traditionally.”
The tax cuts that Republicans are eyeing in the agenda package are an extension of the 2017 Tax Cuts and Jobs Act — key provisions of which are set to expire at the year’s end — and Trump’s campaign pledge of no taxes on tips, overtime pay or Social Security.
Additionally, Republicans are mulling an increase to the state and local tax (SALT) deduction cap.
Trump’s economic team has been keen on getting tax relief through Congress to give the economy a shot in the arm as markets reel from his tariff push.
Johnson is hoping to get the Trump agenda package to the president’s desk by Memorial Day, but key questions such as how to pay for it and what will get cut remain unanswered.
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