Trump aides are weighing a dramatic break from decades of Republican orthodoxy by hiking taxes on the richest Americans, an eyebrow-raising leak suggested Friday.
White House officials are drawing up plans to raise income taxes on the ultra-wealthy in order to extend tax cuts from Trump’s first term and deliver on the president’s campaign promise to eliminate taxes on tips, a senior White House official told Axios.
The motivations behind the leak are unclear, but imposing tax cuts on the rich would upend the longstanding political dynamics around taxation and government spending.
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Working-class voters have increasingly supported the GOP over the past decade, as Trump has embraced populist messaging targeted at blue-collar voters. As well as promising to eliminate federal taxes on tips, he campaigned on restoring manufacturing jobs, ending the fentanyl crisis, and “securing the border.”
The move would likely infuriate mega-donors, some Republicans in Congress, and perhaps even billionaires in his administration. Raising the top income tax rate would also complicate attacks from Democrats, who have focused on proposed cuts to entitlement programs like Medicare, Medicaid, and Social Security as Republicans try to pass a budget.
Currently, the top income tax rate of 37 percent applies to earnings above $609,351 for individuals and $731,201 for married couples.
Tax cuts from the Tax Cuts and Jobs Act of 2017, one of Trump’s signature legislative victories, are set to expire in 2025, putting Republicans in a bind as they seek to reduce the federal deficit.
“If we renew tax cuts for the rich paid for by throwing people off Medicaid, we’re gonna get f---ing slaughtered,” the White House official told Axios.
The official did not provide specifics and stressed that the discussions are preliminary.
The proposed tax hike would hit many of Trump’s closest aides as well as the president himself, whose net worth has been estimated at $7 billion. His administration includes at least nine billionaires, with the world’s richest man, Elon Musk, serving as a senior adviser.
The GOP has set a target of $2 trillion in spending cuts over the next decade. The party’s right wing seeks to achieve this in part by slashing $880 billion from Medicaid and green energy tax credits, citing waste and fraud within the program, while more moderate Republicans are pushing for a smaller $250 billion cut to Medicaid.
The plans were being discussed in the West Wing ahead of a crucial deadline: Congress must pass a massive tax and spending bill, which Senate Majority Leader John Thune said Monday he wanted to pass by April 11.
