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U.S. President Donald Trump points as he attends the annual Friends of Ireland luncheon hosted by U.S. House of Representatives Speaker Mike Johnson (R-LA) at the U.S. Capitol in Washington, D.C., U.S., March 12, 2025.\u00a0<\/p>\n
Evelyn Hockstein | Reuters<\/p>\n<\/div>\n<\/div>\n<\/div>\n
As Republicans wrestle with funding their massive spending and tax package<\/a>, President Donald Trump<\/a> is eyeing a possible tax hike for the highest earners.<\/p>\n The idea, which lacks Republican support, could return the top federal income tax rate<\/a> to 2017 levels for some of the wealthiest Americans. \u00a0<\/p>\n In a phone call Thursday, NBC reported, Trump pressed House Speaker Mike Johnson, R-La., to raise the top income tax rate<\/a> on the wealthiest Americans and close the so-called carried interest loophole<\/a>.\u00a0The proposal would revert the 37% rate to 39.6% for individuals making $2.5 million or more per year, to help preserve Medicaid and tax cuts for everyday Americans.<\/p>\n More from Personal Finance:<\/strong> Trump on Friday expressed openness<\/a> to the tax hike on the wealthiest Americans in a\u00a0Truth Social<\/a> post, noting he would “graciously accept” the tax increase to “help the lower and middle income workers.”<\/p>\n “Republicans should probably not do it, but I’m OK if they do!!!” he wrote.<\/p>\n Enacted by Trump, the Tax Cuts and Jobs Act, or TCJA, of 2017 created sweeping tax breaks<\/a> for individuals and businesses. Most will sunset after 2025 without an extension from Congress.<\/p>\n The TCJA temporarily dropped the highest income tax rate from 39.6% to 37%. For 2025, the 37% rate kicks in for single filers once taxable income exceeds $626,350. \u00a0 \u00a0<\/p>\n<\/div>\n If signed into law, a top 39.6% income tax rate would return wealthy taxpayers to pre-TCJA levels from 2013 to 2017. Before that, the top rate was 35%<\/a> during most of the early 2000s, according to data collected by the Tax Policy Center. The highest top rate was 94% from 1944-1945.<\/p>\n However, this data doesn’t reflect how much income was subject to top rates or the value of standard and itemized deductions during these periods, the organization noted.<\/p>\n<\/div>\n With control of Congress, Republicans can pass legislation through a process known as “reconciliation,” which can sidestep the Senate filibuster with a simple majority.\u00a0<\/p>\n However, there’s still disagreement about what should be included in the multi-trillion-dollar bill and how to finance it.\u00a0<\/p>\n Lawmakers face “a pretty simple math issue,” with many proposals not covering the cost, Yale Budget Lab president and law professor Natasha Sarin told CNBC’s “Squawk Box”<\/a> on Friday.\u00a0 \u00a0<\/p>\n “We’re not getting anywhere close to the type of revenue increases we need,” she said.<\/p>\n<\/div>\n
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