It’s the Democrat idea that just won’t die – raising taxes on high earners, a “millionaires’ tax hike.” Despite three separate attempts by President Trump last week to knock down, once and for all, the possibility of a “millionaires’ tax hike” being included in Trump’s “Big, Beautiful Bill,” some members of Congress just refuse to give up on the idea of breaking President Trump’s promise of “permanent income tax cuts all across the board.”
Breaking President Trump’s version of a no-tax-increase pledge would be wrong.
Trump is right to dismiss the idea of raising taxes on high earners.
He did so last Tuesday, through a note to Newt Gingrich that read, “Newt is quite possibly right on this. George Bush said, ‘Read my lips. No new taxes,’ then proceeded to give a rather small increase, and was obliterated.”
To silence any doubters, Trump then repeated himself the following day in the Oval Office, saying of a potential millionaires’ tax, “It would be very disruptive, because a lot of the millionaires would leave the country. 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.”
And, knowing it would be published later in the week, just for good measure, he discussed it again in his First 100 Days interview with TIME magazine. Asked if he supported raising taxes on millionaires, he said “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.”
In his determination not to hike taxes on high earners, Trump has backup from the most important Republican on Capitol Hill – Speaker Mike Johnson, who, when asked, said, “I would not expect that. We have been working against that idea. I’m not in favor of raising the tax rates because our party is the group that stands against that traditionally. I don’t think we’re raising taxes on anybody. What we’re trying to do is prevent the largest tax increase in U.S. history.”
Raising the tax rate on high earners would be a double whammy, politically – first, it would be seen as breaking a campaign promise almost as famous as George H.W. Bush’s fabled 1988 “Read my lips” campaign promise; second, it would negate at least partially the pro-growth aspect of the Big, Beautiful Bill.
Texas Republican Congressman Chip Roy has the answer. “Morally,” he said, “I believe taxes should be lower for everybody across the board. We don’t need to be taxing the American people as much as we are. However, I also need the math to add up.”
And how does Roy propose to make “the math add up”? By cutting spending.
Roy is one of the House Freedom Caucus’ most adamant deficit hawks. He insists that the budget reconciliation bill include significant spending reductions – so much so that in explaining his vote for the Senate-amended budget resolution, he said he did so on the basis of three commitments made by PresidentTrump, Speaker Johnson, and Senate Majority Leader John Thune, the net result of which would be to reduce spending significantly.
It's really not that difficult to understand. All one has to do is look at the Congressional Budget Office’s most recent update to its 10-year projections: CBO projects that under current law, the federal government will spend between fiscal year 2025 and fiscal year 2035 the staggering sum of $89.3 trillion, rising from $7 trillion (23.3 percent of Gross Domestic Product) in 2025 to $10.6 trillion (24.0 percent of GDP) in 2035. Both numbers are significantly higher than the average spending level as a percentage of GDP over the last 50 years, which is 21.1 percent of GDP.
On the other hand, projected revenues during this decade will total $67.5 trillion, rising from $5.2 trillion (17.1 percent of GDP) in 2025 to $8.0 trillion (18.3 percent of GDP) in 2035, averaging 18.1 percent of GDP over the decade, higher than the 50-year average of 17.3 percent of GDP.
As these numbers prove, we don’t have a revenue problem, we have a spending problem: Tax revenues are up compared to their 50-year average, but spending is up even more.
What is needed is a combination of tax cuts, to stimulate the economy, and spending cuts, to begin to “make a down payment on our $36 trillion national debt,” in Roy’s words.
President Trump is right to be determined not to raise taxes on high earners. Speaker Johnson is right to back him up on that front. And Congressman Roy is right to be committed to spending reductions.
A bill that combines tax cuts with spending cuts is what America’s grassroots want – and what America’s grassroots expect.
Jenny Beth Martin is Honorary Chairman of Tea Party Patriots Action.