President Donald Trump urged House Speaker Mike Johnson in a private call to raise taxes on the wealthiest Americans and eliminate the carried interest loophole, according to sources familiar with the conversation. The push comes as Republicans work to finalize a comprehensive tax reform package ahead of the May 26 Memorial Day deadline.
The new legislation seeks to extend key provisions of the 2017 Tax Cuts and Jobs Act while introducing fresh tax cuts for the middle and working class. Trump's proposal includes raising the top income tax rate from 37% to 39.6% for individuals earning over $2.5 million and joint filers earning over $5 million, with exemptions for small businesses. One source stated the increase would help offset generous tax cuts and protect programs like Medicaid.
Trump’s populist MAGA base has long demanded higher taxes on the ultra-wealthy, but Republican leadership has hesitated. Treasury Secretary Scott Bessent previously said Trump had dismissed the idea, signaling possible shifts in strategy as negotiations intensify.
Current GOP proposals aim to reduce federal spending on Medicaid and nutrition assistance while scrapping environmental tax credits to fund the tax cuts. These cost-cutting measures have faced pushback from moderate Republicans, complicating efforts to find consensus.
House Budget Committee Chair Jodey Arrington admitted that spending cuts have been the most difficult part of negotiations. Republicans are targeting $2 trillion in savings over a decade to secure the permanence of Trump’s earlier tax reforms. Meanwhile, House Ways and Means Committee Chair Jason Smith signaled that closing tax loopholes for the wealthy may be part of the final package.
The bill, dubbed by Trump as his “one big beautiful” plan, remains a top Republican priority in the weeks ahead.