Republicans returning to Capitol Hill next week will have plenty of decisions to make as they draft their massive package of trillions of dollars in tax breaks and spending reductions. As they hunt for ways to offset the cost of extending the 2017 tax cuts and the new cuts Trump promised on the campaign trail, the idea of raising taxes on the rich keeps swirling. Don’t count on it happening.
President Trump himself has dismissed the idea as politically problematic, even as he has said he favors it.
In his newly published interview with Time magazine, conducted earlier this week, Trump pointed to President George H.W. Bush as a reason he wouldn’t favor a tax hike on the wealthy. “Well, I’ll tell ya, I certainly don’t mind having a tax increase, and the only reason I wouldn't support it is because I saw Bush where they said, where he said ‘Read my lips’ and he lost an election,” Trump said, referring to Bush’s famous reversal of a promise to not raise taxes.
Trump — who in 2016 bragged that not paying taxes “makes me smart” — told Time this week that he “would be honored to pay more” and the increase wouldn’t be all that painful, but he worried about being tarred as a tax-hiker. “I could just see somebody trying to bring that up as a subject, and, you know, say, ‘Oh, he raised taxes,’” Trump told Time. “Well, I wouldn't be, really, you know, in the true sense, I wouldn't. I'd be raising them on wealthy to take care of middle class. And that's—I love, that. I actually love the concept, but I don't want it to be used against me politically, because I've seen people lose elections for less, especially with the fake news.”
Speaking to reporters in the Oval Office on Wednesday, Trump added another reason he wouldn’t raise taxes on the rich: “I think it would be very disruptive, because a lot of the millionaires would leave the country,” he said. “The old days, they left states. They go from one state to the other. Now with transportation so quick and so easy, they leave countries.”
Trump added that it would be costly to have wealthy people flee the country over taxes. “You’ll lose a lot of money if you do that," the president said. “Other countries that have done it have lost a lot of people. They lose their wealthy people. That would be bad, because the wealthy people pay the tax.”
House Speaker Mike Johnson earlier this week also dismissed the idea of a tax increase on millionaires. “I would not expect that. We have been working against that idea,” Johnson told Fox News. “I'm not in favor of raising the tax rates because our party is the group that stands against that traditionally. So there are lots of ideas thrown out on the table along this process over the last year, but I would just say for everybody, just wait and see.”
The bottom line: Most Americans continue to favor higher taxes on top earners, and some Republicans have reportedly considered the idea as one option to limit the deficit damage of their party-line bill containing Trump’s costly legislative agenda. Former Trump strategist Steve Bannon has been publicly urging Republicans to pair budget cuts with tax increases with tax increases on the wealthy. But any populist or budgetary pressure to raise tax rates on the wealthy is certain to face pushback across all levels of the Republican Party, from Trump on down.