President Donald Trump has signaled openness to a modest tax increase on America’s ultra-wealthy, proposing a return to a 39.6% top income tax rate for individuals earning over $2.5 million annually—up from the current 37%. The move, aimed at balancing costs within a forthcoming Republican tax-and-spending package, marks a strategic shift from the broader tax cuts he championed in 2017.
But Trump isn’t embracing the idea without hesitation. He issued a pointed warning to fellow Republicans: tread carefully. “Raising taxes on anybody, especially right now, comes with serious political risks,” Trump said, reportedly referencing the fallout from George H.W. Bush’s infamous broken “no new taxes” pledge in the early 1990s.
Trump’s comments reflect his pragmatic, results-driven approach to fiscal policy. While open to tweaks at the top end of the tax code to support spending reforms or offset budgetary items, he remains wary of allowing Democrats to weaponize tax policy against Republicans in an election year.
The proposal has already sparked division within the GOP. Some party leaders and conservative tax advocates, including Grover Norquist, have expressed strong opposition, warning that any hike—even one narrowly targeted at high earners—could damage small business owners and undermine core Republican economic principles.
Still, Trump’s stance shows his continued dominance in shaping the party’s direction. His willingness to explore unconventional ideas, so long as they are coupled with broader economic growth strategies, underscores a larger theme of his second-term agenda: bold reform without falling into ideological traps.
“Republicans should be smart and strategic,” Trump added. “We don’t need to give Democrats an opening to say we’re going soft or making the same mistakes they did.”
As discussions around the GOP tax bill continue, it remains to be seen whether Trump’s idea gains traction or serves as a negotiating tactic in a broader fiscal overhaul. What’s clear is that Trump is again setting the tone—and making sure the GOP remembers the political scars of past tax battles.