AP Photo/Alex Brandon
Axios reported on Friday that President Donald Trump’s administration is eyeing allowing taxes to rise on the richest Americans in order to pay for some of his other agenda items.
Marc Caputo and Neil Irwin shared the byline on the article that reported on the “surprising option to help fulfill his campaign-trail promises: Allowing the richest Americans’ tax rates to rise in return for cutting taxes on tips, a senior White House official tells Axios.”
“Some White House officials believe letting income taxes on the very highest earners rise would buy breathing room on other priorities, and help blunt Democrats’ attacks as they seek to extend President Trump’s 2017 tax cuts,” the report added before noting, “Officials say all discussions are preliminary and nothing is set in stone.”
Trump has long promised to renew his 2017 tax cuts, which are set to expire at the end of the year. Axios broke down the numbers on what it would mean for high earners if Trump’s cuts were not extended:
By the numbers: Currently the top income tax rate is 37%, charged on income above $609,351 for an individual or $731,201 for a married couple.
If the 2017 law were allowed to expire, that would jump to the pre-2018 rate of 39.6%, and lower the threshold above which the top rate applies.
Around 1% of taxpayers are in that top bracket, though they pay a disproportionate share of income taxes.
Under the budget reconciliation rules that Republicans seek to use to extend the tax cuts, that would free up more revenue that could be used to fulfill some of Trump’s populist promises, such as eliminating taxes on tips.
The report added that the potential pivot on taxes comes amid internal concern about the optics of cutting services for Americans while also lowering taxes on the richest earners in the country.
“If we renew tax cuts for the rich paid for by throwing people off Medicaid, we’re gonna get f–king slaughtered,” a White House official told Axios.
Read the full report here.
