Republicans in Congress are considering increasing taxes on the rich as a part of President Trump’s “big beautiful bill” of ambitious legislative priorities, a striking development that breaks with decades of party orthodoxy and is spurring alarm bells from traditional conservatives.
The discussions are in the early stages, and lawmakers say it is possible that no tax hike makes it in the final legislation. But the once-inconceivable consideration of tax increases underscores the tricky task that Republicans have in meeting competing demands from fiscal hawks, moderates, and tax slashers for the ambitious party-line bill — as well as the rise of populist instincts in the party.
One idea being discussed is a roughly 40 percent top tax bracket on income over $1 million, one House Republican confirmed to The Hill. Bloomberg News first reported that proposal.
Sen. Chuck Grassley (R-Iowa) also confirmed that the idea is being discussed in a town hall on Tuesday when asked about increasing taxes on billionaires.
“It might surprise you that the list of possibilities we have on our working sheet that the members of the Finance Committee — and I’m a member of that committee — are going to discuss is raising from 37 to 39.6 on the very group of people you talk about,” Grassley said.
“Now, that doesn’t mean it’s going to happen,” Grassley added. “And the rationale for it is we can take that money and use it for increasing child tax credit.”
Raising the top marginal tax rate to 39.6 percent from its current level of 37 percent amounts to almost the same thing as reverting to the pre-2017 tax code — and a rate that the code would return to at the end of the year if Republicans do not pass an extension of Trump’s 2017 tax cuts.
The difference in what is being discussed, though, is that a top rate of 39.6 percent under consideration would apply to households making more than $1 million. The top rate of 37 percent that’s currently in place applies to households making $609,351 and above.
After clearing a hurdle in passing a budget resolution blueprint last week, Republicans are now crafting the details of the “big beautiful bill” that will move through the special reconciliation process that allows it to pass with only Republican votes. In addition to border and energy priorities, Trump wants the bill to extend expiring tax cuts that he signed into law in 2017, as well as potentially include some of his campaign promises like no taxes on tips.
The list of priorities is expensive, though — and raising the top income tax rate could help Republicans with the deficit and political math for the bill. Fiscal hawks are demanding that it be deficit neutral, while moderates are balking at deep cuts to programs like Medicaid that could offset the cost of any of Trump’s tax priorities.
Raising taxes on the rich could be a long shot, though. House Republican leaders have expressed opposition to the idea.
Asked about a potential tax hike in a press conference last week, Speaker Mike Johnson (R-La.) said that “generally we’re trying to reduce taxes around here.” He pushed back again on Fox News’s “Sunday Morning Futures,” saying: “I’m not a big fan of doing that. I mean, we’re the Republican Party and we’re for tax reduction for everyone.”
That pushback came after Rep. Andy Harris (R-Md.), chair of the House Freedom Caucus, expressed support for the idea, calling a 40 percent tax bracket a “reasonable way to pay for” Trump’s priorities.
But comments from Grassley this week, and Republicans confirming that the idea is still being considered, show that the idea of a top tax rate increase is having staying power in the party.
That is alarming longtime conservatives, such as Grover Norquist of Americans for Tax Reform, who has made a career out of getting Republicans to pledge to not raise taxes and making the Republican Party brand synonymous with tax cuts.
Asked about the prospect of Republicans supporting a tax hike in a press conference last week, Norquist turned to a metaphor about the public shock and damage that would follow from a consumer finding a rat head in a Coca-Cola bottle.
“Republican elected officials who vote for tax increases are rat heads in a Coke bottle. They damage the brand for everyone else,” Norquist said.
Trump himself, tax slash advocates note, previously campaigned against Democrats raising the top tax rate, saying at one campaign stop: “It’s hard to say, ‘Would you please vote for me to raise the tax.’ They’re going to raise it up to 39 or 40 percent or maybe even 50 percent.”
Conservative cable news personalities are also pushing back on the idea.
“I don’t like it one bit. I hope it’s not true. What good would that do? By the way, the top end pays half the taxes in the first place,” Larry Kudlow, a Fox Business host and former Director of the National Economic Council during Trump’s first term, said while interviewing Rep. Elise Stefanik (R-N.Y.) on Tuesday.
Stefanik, for her part, also pushed back on the idea: “We do not support raising taxes. The Republican Party stands for cutting taxes. President Trump supports cutting taxes, he has said that in rallies all across the country.”
Former Speaker Newt Gingrich (R-Ga.), who has remained a prominent figure in the Republican Party, pushed back in another post on X this week: “Republicans should reject any effort to raise taxes as part of the Budget Reconciliation bill. Some people are proposing a top income tax rate which would be higher than Clinton, Obama or Biden. That would be madness and would defeat the bill.”
But Rep. Chip Roy (R-Texas), another member of the House Freedom Caucus and fiscal hawk, responded with a cheeky alteration of Gingrich’s own phrasing: “Republicans should reject any effort to increase deficits as part of the Budget Reconciliation bill. Some people are proposing additional tax cuts without commensurate spending cuts. That would be madness and would defeat the bill.”
Tobias Burns contributed.
