Two Trump-endorsed tax hikes on wealthy left out of GOP tax bill – Washington Examiner
House Republicans have excluded two tax hikes endorsed by former President Trump on wealthy individuals from their recent tax legislation, which was released on Monday. These exclusions involve proposed tax increases on private equity firms and millionaires, highlighting a meaningful omission in the GOP’s sweeping tax plan. While the new legislation aims to extend and make permanent certain provisions from the 2017 Tax Cuts and Jobs Act, it has also sparked criticism from Democrats, who label it a tax break for the rich.
Notably, the proposal does not reinstate a higher tax bracket for millionaires or enact new taxes on carried interest—a type of income primarily earned by private equity firms, which critics argue should be taxed at higher rates. despite Trump’s previous endorsement of these measures as necessary for fairness, he expressed reservations about even modest tax increases for the wealthy, suggesting that it could lead to political backlash against Republicans.
The legislative text is still in the formative stages and will undergo further debate and amendment, with the House Ways and Means Committee scheduled to review the bill shortly. the ongoing discussions may yet bring changes to the proposed tax structure as lawmakers consider various options.
Two Trump-endorsed tax hikes on wealthy left out of GOP tax bill
House Republicans left tax increases on private equity firms and millionaires out of their sweeping tax legislation, two provisions endorsed by President Donald Trump that would have affected the wealthiest taxpayers.
Republicans released the legislative text on Monday that features extending and making permanent various expiring provisions from the 2017 Tax Cuts and Jobs Act, as well as other priorities from Trump. But just as notable is what was left out of the reconciliation proposal.
For one, the legislation doesn’t include a new millionaire tax bracket. Trump had reportedly been considering the idea of letting the top individual rate revert back from 37% to 39.6% for taxpayers earning over $2.5 million.
Democrats have been messaging that the planned GOP reconciliation bill, a legislative vehicle that allows bills to bypass the filibuster and pass with only a simple majority in the Senate, is a tax giveaway to the rich despite it extending tax cuts for most brackets.
There are some who think that a small increase for the wealthiest taxpayers would help Republicans counter that messaging, although Trump in a Friday social media post said that Democrats might accuse him of raising taxes despite promises to keep them low.
“The problem with even a ‘TINY’ tax increase for the RICH, which I and all others would graciously accept in order to help the lower and middle income workers, is that the Radical Left Democrat Lunatics would go around screaming, ‘Read my lips,’ the fabled Quote by George Bush the Elder that is said to have cost him the Election,” Trump said. “NO, Ross Perot cost him the Election! In any event, Republicans should probably not do it, but I’m OK if they do!!!”
Also left out was a tax hike on carried interest, income earned primarily by private equity. Carried interest is a kind of income that some investment firms earn while managing investors’ money. It is taxed at the rates on investment income, but critics say it should be taxed at the higher rates that apply to labor income.
Trump has called the current treatment of carried interest a “loophole” that needs to be closed, and has argued that it benefits some of the richest people in the country
Supporters of the status quo, however, argue that hiking taxes on carried interest would be arbitrary, slows economic growth, and can deprive businesses of a source of investment.
Drew Maloney, president of the American Investment Council, said in a recent statement that private equity and private credit industries invest some $700 billion every year into the economy and that 12 million workers are employed by private equity-backed companies.
“The President’s 2017 law struck the right balance on carried interest, and we’re pleased that the new legislation will encourage more long-term investment across America,” Maloney said in a statement provided to the Washington Examiner after the legislative reconciliation text was released on Monday.
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Still, it is worth noting that while the legislative text doesn’t include a millionaire tax hike or a hike on carried interest, the legislation is not final and will be debated and amended.
The House Ways and Means Committee is set to hold its markup of the legislation on Tuesday afternoon. During that process, the various tax proposals will be debated and amendments to the legislation offered.
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