WASHINGTON — Top House Republicans are tamping down proposals to increase taxes on the highest earners despite reported conversations inside President Donald Trump’s circles that such a move could help pay for the party’s massive tax reconciliation package.
House Speaker Mike Johnson, R-La., brushed off suggestions that Republicans were looking at the tax hike while they prepare the reconciliation bill, telling Fox News’s Maria Bartiromo on Sunday he is “not a big fan” of the idea. Although there are “lots of discussions, lots of ideas” on how to find offsets, Johnson said no strategies have been finalized.
“We’re the Republican Party and we’re for tax reduction for everyone. That’s a general principle that we always try to abide by,” Johnson said. “But I wouldn’t put any money on any of that yet. I would say just to stay tuned. The next five to six weeks are going to be critical as all of these negotiations happen in the committees of jurisdiction.”
Texas Rep. Jodey Arrington, GOP chairman of the House Budget Committee leading the way on the reconciliation package, told reporters on Friday there have not been formal discussions on whether to increase taxes for those in the 1% tax bracket. Instead, Arrington said, the conversations were centered on finding spending offsets elsewhere.
“I think the offsets are more for … special interest tax breaks or loopholes,” Arrington said. “I think the focus of savings is on the spending reduction side, but I’m speaking for myself. You might get a different answer if you talk to other Ways and Means members. But I don’t want to presume on where Chairman (Jason) Smith is on that.”
Meanwhile, Senate Majority Leader John Thune, R-S.D., said the idea of a millionaire’s tax has “been discussed,” although he noted it’s unclear “where that’ll land.”
“It’s something we would have to work closely with the House and with the White House on,” Thune said last week. “There’s a lot of stuff, a lot of proposals flying around in the tax space, and in the end, we’ll have to find consensus. But the important thing is making sure the taxes don’t go up on the American people, and in particular, working families and small businesses at the end of the year, which is what will happen if we don’t move.”
House Freedom Caucus Chairman Andy Harris, R-Md., hasn’t shut the door on the idea, saying earlier this month that lawmakers should look at restoring a higher tax bracket on million dollar incomes if “we can’t find spending reductions.”
However, Harris’s office told the Deseret News the chairman’s top priority is to find those savings cuts in other ways, with the tax hike for top earners to be used as a backup option. Other lawmakers have echoed similar sentiments in conversations with the Deseret News, noting they would support a millionaire tax hike “to the extent it’s necessary.”
The mixed messaging comes as White House officials have reportedly floated a tax hike for the top bracket as a way to offset trillions of dollars in tax cuts proposed in Trump’s upcoming reconciliation package.
As an added benefit, raising taxes for the 1% could also work as a messaging tactic against Democrats accusing Republicans of slashing welfare programs such as Medicaid to pay for tax cuts for the rich, according to Axios.
“If we renew tax cuts for the rich paid for by throwing people off Medicaid, we’re gonna get … slaughtered,” a senior White House official told the outlet.
But it could be tricky to get some GOP lawmakers on board with the tax hike, especially as the party has focused much of its messaging on lowering taxes to boost economic growth.
It’s not yet clear whether Republicans will move forward with the tax cuts in the reconciliation package, which lawmakers are set to begin drafting when they return to Washington on April 28. From there, committees will have just under a month to finalize the legislation if they want to stick to their original deadline of Memorial Day — an ambitious timeline as GOP leaders still need to work out a number of disagreements on core portions of the framework.