‘Republicans should probably not do it’: Trump waffles on tax hikes for the rich

President Donald Trump’s position on raising taxes for wealthy Americans has changed, causing confusion within the Republican Party. At first, he supported increasing taxes on people making more than $2.5 million per year and married couples making more than $5 million, suggesting a possible tax rate increase from 37% to 39.6%.

This idea, along with closing the carried-interest loophole that benefits Wall Street investors, was discussed as a way to help pay for his large tax and spending plan, which he called the “one big beautiful bill.” Trump saw higher taxes on the rich as a way to pay for bigger tax cuts for middle and working-class Americans and to safeguard programs like Medicaid.

However, Trump has expressed doubts, saying that even a “small” tax increase could become a major political problem for Republicans. He warned that Democrats would use it against them, comparing it to George H.W. Bush’s 1988 campaign promise not to raise taxes, which he later broke. Some believe this broken promise contributed to Bush losing the 1992 election. Trump decided that while he personally wouldn’t mind the tax increase, Republicans “should probably not do it.” as reported by Reuters.

Trump flip flops on taxing the rich

On Truth Social, Trump went further, saying “The problem with even a “TINY” tax increase for the RICH, which I and all others would graciously accept in order to help the lower and middle income workers, is that the Radical Left Democrat Lunatics would go around screaming,“Read my lips,” the fabled Quote by George Bush the Elder that is said to have cost him the Election. NO, Ross Perot cost him the Election! In any event, Republicans should probably not do it, but I’m OK if they do!!!”

This back-and-forth has put House Speaker Mike Johnson in a tough spot. Johnson originally wanted a $4.5 trillion tax cut package, but later lowered that number to $4 trillion because of budget limits. The Republican debate over where to cut spending to balance these tax cuts makes things even more complicated, threatening the full extension of Trump’s 2017 Tax Cuts and Jobs Act.

Since spending cuts will likely fall short of the $2 trillion target over ten years, Republicans face pressure to find other ways to raise money. Johnson and other top Republicans have opposed raising taxes on the wealthy in the past.

According to the Tax Foundation and the Penn Wharton Budget Model, the proposed tax increases could bring in a lot of money. Morningstar suggests it could be between $18.4 billion and $22.3 billion over ten years. However, they are also controversial because they could hurt businesses. More than 90% of U.S. businesses are structured as pass-through entities, meaning their profits are taxed at individual income tax rates.