40% on $1m income? Tax hike talks in US gain steam

Republicans in the White House, Senate and House are drafting analyses on how best to craft a new tax bracket for the wealthiest Americans, work that signals the GOP under President Donald Trump is seriously considering ideas to raise taxes on the rich.

The House proposal would set the new rate at 40% for taxpayers earning $1 million or more a year, according to people familiar with the proposal. Economic policy aides in the Senate and the Trump administration have been studying the idea as well, according to people briefed on the work.

A White House official, speaking on the condition of anonymity to discuss private conversations, said Trump is open to the idea of a new top tax bracket. However, the person emphasized that the higher rate should kick in at a threshold far greater than $1 million.


"We are investigating and having discussions with Congress about a variety of potential offsets," deputy treasury secretary Michael Faulkender said Tuesday at an event in Washington, noting that there are "many, many ideas" being studied to minimize the total cost of the tax bill though no decisions have been made. Treasury secretary Scott Bessent said in an interview Monday with Bloomberg News that "everything is on the table" with regards to the tax bill.

A Senate Finance Committee spokesperson declined to comment. Representatives for the White House and the House Ways and Means Committee did not immediately provide comment. The discussions about a new tax bracket for millionaires come as Republicans are looking for ways to pay for a sweeping tax bill by the end of 2025 when several of Trump's first-term cuts expire. The current top tax rate is 37% for individuals earning more than $626,350 a year.

The higher rates could be a way to offset the cost of an expanded state and local tax deduction, a popular and politically important tax break for swing district Republicans in New York, New Jersey and California, one person said.