The Trump administration is discussing a 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.
The big picture: 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.
- Officials say all discussions are preliminary and nothing is set in stone.
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.