Republicans propose new 40% tax rate for millionaires

Republican lawmakers and the Trump administration are considering introducing a new tax bracket with a 40% rate for individuals earning more than $1 million annually, as a means to fund new tax cuts and offset costs associated with expiring tax provisions. Currently, the top tax rate is 37% for those earning over $626,350, and the proposal marks a significant shift from traditional Republican tax reduction principles. While some GOP leaders, including President Trump, are open to the idea, others within the party, like House Speaker Mike Johnson, express skepticism and prioritize tax cuts over increases. This debate reflects broader tensions within the party regarding its relationship with wealthy Americans versus its growing working-class base. The proposal is part of a broader effort to address the financial implications of continuing the 2017 tax cuts, which are set to expire soon. However, the potential tax hike remains contentious, with some Republicans outright rejecting the idea and focusing instead on spending offsets and other methods to manage costs.