White House quietly mulls millionaire tax hike as House GOP leaders object

White House aides are reportedly considering a proposal to raise the tax rate for individuals making over $1 million to 40% in order to offset the cost of eliminating tips on overtime pay, tipped wages, and retirees’ Social Security. While the discussions are preliminary and one of many being considered by congressional Republicans, it highlights the deep divide within the party on how to advance President Trump’s tax agenda.

Speaker Mike Johnson has publicly opposed any tax hikes, stating that the Republican Party is for tax reduction for everyone. However, some GOP lawmakers are open to supporting the proposal, with one suggesting a higher starting point than $1 million. The reaction among House Republicans is said to be mixed, and not all lawmakers are aware of the discussions.

Extending Trump’s 2017 Tax Cuts and Jobs Act and enacting his newer tax proposals is a key focus for Republicans in the budget reconciliation process. This process allows the party to pass legislation with a simple majority, bypassing opposition. Funding new policies while extending tax cuts is expected to cost trillions, making it necessary to find ways to pay for them.

Raising taxes on the ultra-wealthy could put Democrats in a difficult position, forcing them to choose between supporting Trump’s policies and opposing an idea they have advocated for years. House Freedom Caucus Chairman Andy Harris suggested that raising the tax rate for millionaires could be one way to finance Trump’s tax policies.

House Majority Leader Steve Scalise and other GOP leaders have expressed opposition to raising taxes on the rich, preferring to find spending reductions elsewhere in the budget. Ultimately, the decision on whether to implement the proposed tax hike rests with President Trump, who has not yet taken a position on the matter.

The proposal to raise the tax rate for millionaires to 40% was first reported by Bloomberg News. As discussions continue within the GOP, it remains to be seen how the party will navigate the challenges of funding new policies while extending tax cuts. The White House has not made a final decision on the matter, leaving room for further debate and negotiation among Republicans in Congress.