WASHINGTON (AP) – After considering the prospect of raising the top tax rate for wealthy millionaires, President Donald Trump has recently softened his stance. On social media, he expressed concerns that increasing taxes, even on affluent individuals, could provoke a political backlash reminiscent of the “Read my lips: No new taxes” pledge made by former President George H.W. Bush, which ultimately contributed to his defeat in 1992.
Trump's latest comments came shortly after he proposed a higher tax rate for single filers earning $2.5 million and above. While he warned Republicans against pursuing tax increases, he did not entirely dismiss the possibility of such measures being included in their extensive tax breaks and spending cuts package currently being refined for a House vote by Memorial Day.
In his social media post, Trump acknowledged the challenges of enacting even a "TINY" tax increase for the wealthy, stating that it could lead to cries reminiscent of Bush's broken pledge. However, he also indicated a level of acceptance for Republican lawmakers to consider the tax hikes if they chose to pursue them. "In any event, Republicans should probably not do it, but I’m OK if they do!!!" Trump wrote.
This discussion comes as the Republican Party grapples with internal divisions over the proposed tax reforms. Trump’s fluctuating position on millionaires' taxes adds complexity to the legislative process. Over recent months, he has consistently revisited the idea of imposing higher taxes on the wealthy, and during private discussions, he reiterated this stance to House Speaker Mike Johnson.
Trump believes that higher taxes on millionaires could counter the Democratic narrative suggesting that the GOP's tax plan primarily benefits affluent individuals, including billionaires like Elon Musk. Currently, under Trump's 2017 tax cuts, the top federal tax rate stands at 37% for incomes exceeding approximately $600,000 for single filers, but this is set to expire at the end of the year. Trump is advocating for the rate to return to 39.6% or even 40%.
During the latest discussions, Trump indicated a preference for a top tax rate on incomes around $2.5 million for individuals and $5 million for couples. This topic has spurred significant debate within the party, with notable opposition from anti-tax activists, including former House Speaker Newt Gingrich and Grover Norquist of Americans for Tax Reform, who are actively working to avert any tax hikes.
In a bid to navigate these complexities, Trump appeared to acknowledge Gingrich's warning related to Bush’s 1988 campaign. Bush's subsequent failure to uphold the no-new-taxes pledge haunted him during his reelection attempt, and Trump previously recognized Gingrich's insights on the matter. However, he controversially suggested that independent candidate Ross Perot was to blame for Bush's electoral defeat.
As the debate continues, the interplay of Trump’s populist instincts with the factional interests within the GOP further complicates the tax reform narrative. Some Republican lawmakers, while not enthusiastic about the potential tax increases, recognize that Trump’s endorsement could significantly influence the party's approach. Senator Mike Crapo, the GOP chairman of the Senate Finance Committee, acknowledged this dynamic, highlighting the need to consider Trump's position as discussions proceed.
