Poli Alert Politics & Civics
Related Articles
In a surprise turn, President Donald Trump privately urged House Speaker Mike Johnson, R-La., during a Wednesday phone call to add two proposals to the GOP’s sweeping economic package: raising the top tax rate on high earners and closing the carried interest loophole, according to three Republican sources familiar with the call.
The proposals — uncharacteristic for a Republican president and at odds with Trump’s own previous positions — add new tension to a legislative package already under intense negotiation. The bill seeks to extend key provisions of Trump’s 2017 tax law, bolster immigration enforcement, increase defense funding, and raise the federal debt ceiling.
A shift in Trump’s tax stance
Trump’s call for a tax hike on the wealthiest Americans marks a sharp departure from his recent rhetoric. Just last month, he rejected the idea, warning that it would be “disruptive” and drive wealthy taxpayers overseas.
But during Wednesday’s call with Johnson, Trump floated reverting the top marginal tax rate from 37% back to 39.6% for individuals earning $2.5 million or more annually. The move, he reportedly said, would shield Medicaid from cuts and provide fiscal space for tax relief for middle- and working-class Americans — a key part of his re-election pitch.
According to sources, Trump also pressed Johnson to close the carried interest loophole, a long-criticized tax provision that allows private equity and hedge fund managers to pay lower tax rates on investment income.
GOP leadership caught off guard
The proposals came as House Republicans scramble to find enough offsets to make the sprawling package fiscally viable. With the House Ways and Means Committee scheduled to mark up its portion of the bill next week, sources say Trump’s intervention is forcing a reassessment of previously off-limits revenue raisers.
A senior House Republican involved in the negotiations acknowledged that leadership is now seriously weighing the ideas. “We have to find the savings,” the lawmaker told NBC News. “So I think everything is being taken under consideration.”
The new proposals have sparked internal debate within the House GOP, where increasing taxes on the wealthy remains deeply unpopular. Rep. Don Bacon, R-Neb., expressed concern Thursday, saying the party needs to focus on maintaining tax competitiveness, not raising rates.
SALT and reconciliation timeline
In addition to Trump’s tax hike request, Republican leaders are still wrestling with other controversial elements of the bill — including how to raise the cap on the state and local tax (SALT) deduction, a key demand from high-tax state Republicans.
House GOP leaders are aiming to pass the final reconciliation package before Memorial Day, but with the legislative math proving difficult, that timeline is looking increasingly ambitious.
The White House and Trump campaign have not commented publicly on the substance of the proposals.
