WASHINGTON — House Republicans on Monday released a draft of President Donald Trump’s tax agenda that includes tax breaks on tips, on overtime and on car loans — but they notably left out his proposed tax hike on millionaires.
Trump and some voices within his “Make America Great Again” movement flirted with the idea of a millionaire tax hike as a way to help pay for the rest of the tax cuts and also to undercut Democratic talking points about Republicans coddling the rich while cutting benefits for the poor.
Specifically, the White House said last week that Trump was considering support for a 39.6% tax rate on incomes above $2.5 million.
The highest marginal tax rate in the text unveiled Monday is 37%. The bill would mostly just extend and entrench the temporary household cuts Trump enacted in his first term, with some of Trump’s campaign pitches sprinkled in.
The tax cuts are the core part of what Republicans are calling their “big, beautiful bill,” a massive piece of legislation meant to encompass the president’s second-term domestic policy agenda. The bill faces an uncertain fate amid strong Republican infighting in both the House and Senate.
After warning for years about the evil of budget deficits, Republicans have struggled to come up with enough spending reductions to offset the deficit impact of the tax cuts, with moderates objecting to harsh changes to Medicaid and the Supplemental Nutrition Assistance Program. Trump’s proposed tax hike could have brought in hundreds of billions of dollars, potentially giving Republicans more budget room, but Capitol Hill leaders like House Speaker Mike Johnson (R-La.) never expressed much openness to the idea.
Trump himself seemingly backed off his own millionaire tax proposal after the White House broadcast it on Thursday, saying Friday that while he would “graciously accept” a tiny tax increase on the rich to help pay for cuts for lower-earning households, it would be bad politics for him.
“Republicans should probably not do it, but I’m OK if they do!!!” Trump wrote in a half-hearted post on Truth Social.
The White House didn’t respond to a request for comment on the draft legislation.
Democrats said Trump was never serious about the tax hike anyway, criticizing his administration for seeking draconian cuts to programs like Medicaid that support vulnerable Americans in order to finance nearly $4 trillion in tax cuts.
“The House bill fits on a bumper sticker: Billionaires win; families lose,” said Sen. Elizabeth Warren (D-Mass.).
“Trump gets whatever he wants, so if Trump really wanted a tax increase on the wealthy, he would have gotten it,” Sen. Chris Murphy (D-Conn.) told HuffPost. “The storyline has always been: Kick people off their health insurance in order to pass a tax cut that is disproportionately going to help the very, very, very wealthy.”
Still, the draft tax legislation unveiled Monday by House Ways and Means Committee Chair Jason Smith (R-Mo.) did include several high-profile priorities, including his campaign promises to cut taxes on tips, overtime earnings and car loan interest.
Unlike the rest of the tax bill, however, the campaign items would be temporary, sunsetting at the end of Trump’s term.
“Just like the first tax cut, it’s got table scraps for regular people, but the bulk of this tax cut, especially if you cost it out in the long run, it’s a huge giveaway to corporations and millionaires and billionaires,” Murphy said.