 "American millionaires could be taxed more, Republican legislators drafting a new bill")
Republican leaders, Senate officials, and the White House are pulling all strings to show that the Grand Old Party (GOP) is considering taxing the ultra-rich in the US by drafting a new tax bracket for the wealthy population of the country.
According to a report by Bloomberg, House officials are working on a proposal to set a new rate of 40 per cent for taxpayers who earn more than $1 million per year. Sources told the news outlet that economic policy aides at the Senate and the Trump administration have been looking at the prospect as well.
Trump is also reportedly on board with the plan of a new top tax bracket.
Deputy Treasury Secretary Michael Faulkender on Tuesday said, “We are investigating and having discussions with Congress about a variety of potential offset,” adding that “many, many ideas” are being floated to minimise the cost of the tax bill.
Talks of introducing a new tax bracket for millionaires are gaining traction as Republicans search for ways to fund a major tax package before the end of 2025, when many of the tax cuts from Trump’s first term are set to expire.
Currently, the highest tax rate stands at 37 per cent for individuals earning more than $626,350 annually. Raising taxes on top earners is being considered as a potential method to help cover the cost of expanding the state and local tax (SALT) deduction—a key issue for swing-district Republicans in states like New York, New Jersey, and California, where the deduction is especially popular and politically significant.
However, raising the rate of the top tax might invite criticism from business owners of partnerships, LLCs, and other entities that pay their tax bills on the basis of individual rates in the tax codes.
Impact Shorts
More ShortsA new tax rate targeting millionaires would mark a significant departure from traditional Republican principles, which have long been rooted in a firm opposition to any new taxes.
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