WASHINGTON — President Donald Trump privately pressed Speaker Mike Johnson, R-La., during a phone call on Wednesday to add two additional proposals to the massive package for his agenda: raising the tax rate on the highest earners and closing the so-called carried interest loophole, according to a Republican leadership source as well as two other GOP sources familiar with the call.
The 11th-hour requests from Trump add a new wrinkle to an already complicated process for Republican lawmakers as they desperately try to find enough savings for the bill, which seeks to extend the president’s 2017 tax cuts, boost funding for immigration enforcement and defense, and raise the debt limit.
The White House has kicked around the idea of hiking the top tax rate for the wealthiest Americans for the past few months, and it now believes it is close to finalizing a topline number for the bill, according to one of the GOP sources familiar with the call.
The other GOP source familiar told NBC News that Trump is considering allowing the rate on individuals making $2.5 million or more annually to revert from 37% to the pre-2017 39.6% as a way to help pay for middle and working class tax cuts and protect Medicaid.
Punchbowl News was first to report the Trump-Johnson call.
While Republicans have previously floated the idea of allowing tax rates to go up on top earners when major parts of the 2017 tax law expire at the end of this year, GOP leaders have been resistant to a tax hike on the wealthy, traditionally anathema within the party. But with Trump pushing Johnson to reverse course, and House Republicans struggling to make the math work for their massive bill, leadership is now reconsidering its options.
One senior House Republican closely involved in the negotiations confirmed to NBC News that there has been revived talk inside the House GOP conference over the last 24 hours about potentially allowing the top tax rate to go up, as well as closing the carried interest loophole.
When asked how seriously these new proposals are being taken, the House Republican told NBC News: “At this point we have to find the savings, so I think everything is being taken under consideration.”
The tax-writing House Ways and Means Committee is planning to mark up its portion of the reconciliation bill next week, but is still sorting through a number of thorny issues, such as how to raise the cap on the state and local tax deduction, or SALT. House GOP leaders are aiming to pass the final package on the floor before Memorial Day, which is an ambitious timeline.
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