The Scoop
Congressional Republicans want President Donald Trump to give clear signals as they craft a huge tax cuts bill. Except Trump doesn’t seem in a rush to do that.
The president said over the weekend that he wants to focus tax relief on people making under $200,000, as he keeps mulling whether to endorse tax increases on higher earners and whether to stick to tariffs that could spike prices. Senior Republicans are preparing to pass tax legislation as soon as this summer, but many of their big decisions are publicly in flux.
Trump could help smooth things along — if he chooses to back a single course of action, particularly on tax relief for upper-income brackets.
“Any guidance that he wants to provide is helpful, because otherwise it’s the subject of endless debates — and if in the end it’s going nowhere, it’d be good to know that early,” Sen. John Cornyn, R-Texas, a member of the tax-writing Finance Committee, told Semafor.
Cornyn said his biggest concern was about how any rate increase might affect small businesses, but he also didn’t “see any reason why we need to head down that path.”
Democrats argue that the GOP tax bill “is designed to help rich people, which is complete bunk,” Cornyn added. “I think that’s another reason not to go there.”
Republicans would like as much clarity as possible from Trump before they release legislative drafts, given his huge sway in the party. But he’s questioned the politics of raising taxes on higher earners, even while indicating publicly and privately he’s open to it.
One White House official said the focus on $200,000 annual earners is as specific as Trump has been so far, adding that he is also still “weighing” additional taxes on high earners — despite appearing to back away from the idea several times.
The stakes are high for two big reasons. Tax cuts are shaping up to be Trump and the GOP Congress’ signature accomplishment. That means the structure of those cuts will say a lot about how much the Republican Party has embraced Trump’s more populist campaign rhetoric, which cuts against decades of party doctrine that opposed any tax increase at all.
Taxes on higher earners are set to jump from 37% to 39.6% next year without action by Congress. Democrats are already setting simple terms for the tax debate: Trump’s tax cuts will inordinately benefit the rich at the expense of lower-income Americans. But Trump could temper some of those criticisms by more overtly blessing a tax increase on higher earners.
Another White House official told Semafor that Trump’s overarching goal is to lower taxes on as many people as possible, with a “focus” on the working class.
“The president is reviewing a wide range of tax cut proposals for inclusion in the reconciliation bill,” a senior White House official said. “He is most focused on tax policy that will help create more good-paying jobs in America and delivering the major tax cuts he campaigned on for working- and middle-class Americans.”
Former President Joe Biden set a ceiling of $400,000 in annual earnings to focus his own tax relief efforts — a bright line that Trump’s mention of $200,000 could outdo, if he chose to embrace it.
Know More
Top Trump administration officials met with congressional leaders on Monday evening to continue their work on the tax bill. Asked afterward about whether higher taxes on people making more than $1 million is still on the table, White House economic adviser Kevin Hassett said simply: “The president has said that it’s not.”
Senate Majority Leader John Thune, R-S.D., said the House might be able to finish its bill by Memorial Day, though he said it would take the Senate longer to finalize its legislation. Treasury Secretary Scott Bessent said Monday night that the deadline in his mind is July 4.
Many Republicans are focused on extending an expanded child tax credit, or even increasing its size, as a way of tailoring the tax cuts more toward the middle class. Sen. Josh Hawley, R-Mo., for one, said that if raising taxes on some high earners helped pay for the larger tax credit for parents, he could support such an idea.
But many Republicans hate the idea of any tax increase. Top Republicans on Capitol Hill are staying flexible given the uncertainty, even as they say their focus is tax cuts — not rate increases on anyone.
“Everybody wants to know about this particular provision, that particular provision, but any particular provision needs to be considered in the whole context,” Sen. Bill Cassidy, R-La., a Finance Committee member, said in an interview.
Asked if he could support raising taxes on high earners, he said it needed to be considered in the entirety of the bill: “Show me what the context is.”
The View From Burgess, Shelby, and Eleanor
If Trump decides to truly push for raising taxes on high earners, he’ll have to put real muscle behind it, given the narrow Republican majorities in Congress.
He still might not win that battle — especially since, so far, it’s not clear that he’s keen enough on the idea to wield his bully pulpit in that manner.
For now, the administration seems more focused on devising a separate plan aimed at cutting taxes for middle- to low-income Americans, which Trump campaigned on for the last two years. Even the details of that, though, remain fluid.
Room for Disagreement
Democrats are extremely skeptical that Trump will ever get serious about raising taxes on the wealthy.
Sen. Elizabeth Warren, D-Mass., said Republicans are “on the fast train to tax cuts for billionaires paid for on the backs of public schools, health care for babies and our veterans.”
“Skeptical is not nearly a big enough word. Watch what they’re doing, not what they’re saying. Every single day that goes by, Trump and the Republicans are moving a click forward on giant tax cuts for billionaires, with everybody else picking up the bill,” she told Semafor.