Trump and GOP Leaders Reject Millionaires’ Tax, Complicating Deficit Plans

By IndraStra Business News Desk

Cover Image Attribute: A file photo of a truck with a video protest sign paid for by the Patriotic Millionaires drives past a mansion owned by Amazon founder Jeff Bezos in Washington, DC, on May 17, 2021. / Source: Jonathan Ernst, Reuters

President Donald Trump and House Speaker Mike Johnson, R-La., have firmly rejected proposals to raise taxes on America’s wealthiest citizens, quashing a fleeting Republican consideration of higher rates on millionaires to offset the massive costs of their ambitious legislative agenda. The decision, announced on Wednesday, April 23, 2025, reflects the GOP’s traditional stance against tax increases but risks exacerbating the federal deficit as the party pushes to extend Trump’s 2017 tax cuts and fund new spending priorities.
The debate over a potential tax hike on high earners emerged as Republicans grapple with the fiscal challenges of their party-line bill, which includes extending the 2017 Tax Cuts and Jobs Act (TCJA), projected to cost $4.6 trillion over a decade, and hundreds of billions in new spending on immigration enforcement and defense. Some GOP lawmakers had floated allowing the top marginal income tax rate to revert from 37% to 39.6%, as scheduled at the end of 2025, or even creating a new bracket for incomes exceeding $1 million. Such a move could raise approximately $400 billion over 10 years, according to Kyle Pomerleau, a senior fellow at the American Enterprise Institute (AEI), offering a way to mitigate the deficit impact of the GOP’s plans.
However, Trump dismissed the idea as “very disruptive” during a Wednesday Oval Office press conference, warning that higher taxes could drive wealthy Americans to leave the country. “A lot of the millionaires would leave the country,” he said. “The old days, they left states. They go from one state to the other. Now with transportation so quick and so easy, they leave countries. You’ll lose a lot of money if you do that.” Trump’s assertion, however, overlooks the complexity of tax avoidance through emigration, as U.S. citizens are taxed on worldwide income unless they renounce citizenship and pay substantial exit taxes.
House Speaker Johnson echoed Trump’s opposition, emphasizing the GOP’s historical resistance to tax hikes. “I would not expect that. We have been working against that idea,” Johnson said on Fox News. “I don’t think we’re raising taxes on anybody. What we’re trying to do is prevent the largest tax increase in U.S. history.” His remarks referred to the automatic expiration of the 2017 tax cuts, which, if not extended, would raise taxes for many households, though only about 9% would face higher rates due to other provisions in the law.
The rejection of a millionaires’ tax highlights the GOP’s internal ideological tensions, as a populist shift in its voter base—driven by Trump’s appeal to working-class Americans—clashes with the party’s long-standing commitment to low taxes for all, including the affluent. “This is what appears when you put a lot of pressure on policymakers and the underlying orthodoxy is shifting,” said former GOP Rep. Peter Roskam of Illinois. Yet, Roskam warned that abandoning the party’s anti-tax stance could create “a massive branding problem,” recalling the political fallout from President George H.W. Bush’s 1990 tax hikes, which fractured the GOP.
The idea of raising taxes on the rich gained traction among some Trump allies, including Vice President JD Vance, budget director Russell Vought, and former White House strategist Stephen K. Bannon. Bannon, in particular, has championed the proposal, arguing it could neutralize Democratic criticisms that Republicans favor the wealthy. “This guts the AOC-Bernie ‘oligarchy tour,’” Bannon said, referring to populist rallies by Rep. Alexandria Ocasio-Cortez, D-N.Y., and Sen. Bernie Sanders, I-Vt. “Politically, it’s game, set, match — it’s a no-brainer. This would destroy the Democrats.”
Bannon proposed options such as reverting the top rate to 39.6% for incomes above $626,350 or creating new brackets for those earning over $1 million, $3 million, or $5 million. Treasury Secretary Scott Bessent also expressed openness to taxing incomes above $5 million, according to sources familiar with internal discussions. These proposals reflected a willingness among some Trump advisers to rethink GOP orthodoxy, especially as the party’s base increasingly comprises working-class voters less tied to traditional conservative economic principles.
Yet, the concept faced fierce resistance from influential Republicans and conservative commentators. Former House Speaker Newt Gingrich, who posted a message he claimed came from Trump, called the idea a “dead end.” In the note, Trump reportedly said he would “love the idea of a small increase” but cautioned that it could hurt Republicans politically, advising, “If you can do without it, you’re probably better off.” Gingrich, who led opposition to Bush’s tax hikes, argued that even Trump’s influence might not overcome the political cost. “Nobody on the left will give him any credit for it and it will split his own base,” he said.
Other critics, including Steve Moore, Larry Kudlow, Sean Hannity, and Sens. Dave McCormick, R-Pa., and Ted Cruz, R-Texas, argued that higher taxes would stifle economic growth and betray Trump’s tax-cut promises. Moore, president of the Committee to Unleash Prosperity, likened the proposal to “Bernie Sanders economics,” warning of a “potential crisis in the party.” Business groups, such as the U.S. Chamber of Commerce, also mobilized against the idea. “People have been surprised by the fact that this idea wasn’t shut down more quickly and more forcefully,” said Neil Bradley, the Chamber’s chief policy officer.
The debate has exposed the GOP’s fiscal bind. Rep. Chip Roy, R-Texas, acknowledged the need for fiscal responsibility, saying, “Morally, I believe taxes should be lower for everybody across the board. We don’t need to be taxing the American people as much as we are. However, I also need the math to add up.” Roy estimated that allowing the top rate to rise to 39.6% could save $300 billion, but maintaining lower rates would require significant spending cuts, a politically fraught prospect given Republican plans to protect programs like Medicaid while funding new priorities.
Democrats have seized on the GOP’s tax plans to paint Republicans as prioritizing the wealthy. House Minority Leader Hakeem Jeffries, D-N.Y., criticized Republicans on X, writing, “Why haven’t House Republicans done a single thing to lower the high cost of living in America? The extremists are too busy trying to take away your healthcare and cut taxes for their super rich donors.” A Pew Research Center poll last month found that 58% of U.S. adults, including 43% of Republicans, support raising taxes on households earning over $400,000 annually, suggesting potential public backing for a millionaires’ tax.
Critics of the proposal argue that raising income taxes would do little to address wealth inequality, as the ultra-rich derive much of their wealth from untaxed capital gains and assets. “If you want to tax billionaires, you have to go after their wealth,” said Steve Rosenthal, formerly of the Tax Policy Center. “The money is in the wealth, the retirement savings, the unrealized gains, all of which goes tax-free. So taxing income may not be that big a deal.” Federal data shows fewer than 0.1% of Americans—roughly 150,000 tax returns—earned over $2.6 million in 2020, limiting the revenue potential of income-based tax hikes.
The GOP’s rejection of a millionaires’ tax leaves lawmakers scrambling for alternatives. Some have proposed repealing clean-energy tax credits or raising taxes on university endowments, while Trump has increased tariffs, which economists say disproportionately burden consumers. Republicans are also considering raising the cap on state and local tax deductions, a 2017 provision that affected high earners, though this could negate the fiscal benefits of a tax hike and is likely to be rejected, according to Erica York of the Tax Foundation.
The internal GOP debate reflects broader shifts in the party’s identity. Oren Cass, head of American Compass, a group advocating for conservative economic reform, called the discussion a “positive sign,” noting, “It’s very encouraging to see politicians now actually working through that logic instead of being paralyzed that there are things they’re not allowed to talk about or consider.” However, traditional conservatives remain skeptical. “I don’t see it getting through the Senate Finance Committee — there’s not a chance,” said Doug Holtz-Eakin of the American Action Forum, who predicted the House would also reject the idea.
Trump’s ambitious policy agenda, which includes high-profile proposals to eliminate taxes on tips and overtime pay alongside extending the 2017 TCJA adds further complexity to the fiscal equation. With the expiration of those tax cuts looming at the end of 2025, Congress faces intense pressure to craft legislation that balances economic growth, political promises, and fiscal sustainability. The GOP’s long-standing commitment to maintaining low tax rates, coupled with Trump’s unequivocal rejection of a proposed millionaires’ tax, severely limits revenue-raising options. This stance may compel Republicans to pursue substantial spending cuts, potentially targeting politically sensitive programs like Medicaid, or accept a ballooning federal deficit, which could exceed the $4.6 trillion cost of extending the tax cuts. Such choices risk deepening internal divisions within the party, as populist and traditional conservative factions grapple with conflicting priorities. The coming months will test the GOP’s ability to unify behind a coherent fiscal strategy while navigating the economic expectations of its evolving voter base and the broader public.
With reporting by the NBC, The Wall Street Journal, and The Washington Post

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