Civil war threatens GOP over millionaire tax hikes in Trump's 'big, beautiful bill'

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Trump no tax on tips plan 'somewhat gimmicky,' former WH aide says

Marc Short, former top aide to ex-Vice President Mike Pence, spoke with Fox News Digital about Republicans' tax negotiations

Discussions over a potential tax hike for ultra-wealthy Americans are threatening to foment a civil war among Republicans on Capitol Hill.

Some GOP lawmakers, as well as conservative groups that are frequently in touch with congressional Republicans, have been loudly voicing opposition to any tax increases. 

Meanwhile President Donald Trump and his allies are signaling that the idea could be a way to pay for significant tax breaks targeting middle and working-class Americans.

"Raising taxes on one bracket is a slippery slope. What will stop future tax increases on middle-income earners as the federal government accumulates more and more debt?" a senior House GOP aide told Fox News Digital. "Republicans certainly shouldn’t be the party leading this effort."

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A side-by-side of the U.S. Capitol and former President Donald Trump. (Getty Images/AP Images)

But the idea found support among more populist Trump allies like House Freedom Caucus Chairman Andy Harris, R-Md.

"Personally, I’ve always believed that if we can’t find spending reductions elsewhere, we should look at restoring the [pre-2017 Tax Cuts and Jobs Act (TCJA)] tax bracket on million dollar income to help pay for the President’s agenda," Harris wrote on X.  

It comes after Trump signaled to GOP leaders that he was open to raising taxes on the ultra-wealthy to offset the cost of new policies eliminating taxes on tips, overtime pay and retirees' social security.

A source familiar with the president's thinking told Fox News Digital that to accomplish those goals, as well as preserving Medicaid for millions, Trump is considering a new top income tax bracket of 39.6% for single taxpayers making $2.5 million or more per year.

The TCJA lowered the tax rate for the top income bracket — currently $609,350 for single filers — to 37%, a cut that's expiring at the end of this year.

Trump himself toyed with the idea publicly on Truth Social Friday morning, though made clear he saw the potential drawbacks.

"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 posted, referencing ill-fated comments by late former President George H.W. Bush.

"NO, Ross Perot cost him the Election! In any event, Republicans should probably not do it, but I’m OK if they do!!!"

Senate Majority Leader John Thune, left, and House Speaker Mike Johnson, right, are working to usher Trump's ‘big, beautiful bill’ through Congress. (Getty Images)

Discussions about raising taxes have traditionally been anathema to mainstream Republican beliefs.

But it's now a direction the GOP will have to contend with as Trump continues to bring more middle- and working-class people into the party base – but disagreements on the wisdom of such a move remain.

"'Tax the rich' is a tired slogan with no evidence of spurring economic growth, as higher taxes on any group hinder innovation and investment," Rep. Eric Burlison, R-Mo., told Fox News Digital on Friday.

"We don't have a revenue problem, we have a spending problem. Ultimately, I don't think this will even happen. We must focus on cutting spending and downsizing government, not raising taxes."

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Several Republicans told Fox News Digital late last month that they were wary of raising taxes – including Reps. David Kustoff, R-Tenn., and Tim Moore, R-N.C. Spokespeople for both said their opinions are unchanged as of Friday morning.

"When we passed what was called the Tax Cuts Jobs Act of 2017, we did lower taxes for everybody. We reduced the tax rates. We condensed the brackets," Kustoff said. "And what we saw is, that lifted everybody. And the U.S. Treasury still saw revenues continue to grow. So I don't want to see taxes raised on anybody."

Moore told Fox News Digital, "I do not support any tax increases. I think that we do not have a revenue problem, we have a spending problem."

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Moreover, nearly 200 past and present House Republicans signed onto a pledge to oppose all tax increases, run by think tank Americans For Tax Reform.

But another Republican, Rep. Marlin Stutzman, R-Ind., told Fox News Digital that day, "I would want to see some numbers behind it and how it would have an effect on the economy."

"What I've heard from people in the upper tax brackets is, you know, they're willing to pay more as long as they know that it's paying the debt down. They don't want to see it go towards more spending," Stutzman said.

It's one of several ongoing debates over how to advance Trump's agenda via the budget reconciliation process, which allows the party in power to advance a massive piece of fiscal policy legislation while sidelining the minority by lowering the Senate's threshold for passage from 60 votes to 51.

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Republicans are working to use the maneuver to advance Trump's priorities on border security, immigration, energy, national defense and taxes, as well as raising the debt ceiling.

On taxes, expected to be the costliest portion, Republicans want to extend Trump's 2017 TCJA cuts expiring in 2026 as well as implement his aforementioned newer policies.

Rep. Darrell Issa, R-Calif., a longtime Trump ally, told Fox Business' Stuart Varney on Friday, "We are not going to do tax increases."

But it's not clear how many of those Republicans will change their minds if Trump begins exerting pressure on such tax hikes.

Meanwhile, conservative groups like The Heritage Foundation and Americans For Prosperity (AFP) are already exerting pressure on Capitol Hill to resist any tax hikes.

Rep. Marlin Stutzman said, 'What I've heard from people in the upper tax brackets is, you know, they're willing to pay more as long as they know that it's paying the debt down.' (Getty Images)

"Republicans have a chance to lock in pro-growth tax policy and reignite prosperity for a generation of Americans – something every conservative can agree on. There is no appetite anywhere for raising taxes on anyone," AFP Chief Government Affairs Officer Brent Gardner told Fox News Digital.

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"The sooner Republicans can get back to this broad consensus – keeping taxes low, while cutting wasteful spending – the sooner they’ll all start to see the benefits, both economically and politically."

The House Ways & Means Committee is expected to meet on Tuesday to advance the tax portion of the package, so its details – including the potential tax hike – will be released in the coming days.

Republican leaders hope to have a bill passed in the House of Representatives by around Memorial Day, with a final bill on Trump's desk by the Fourth of July.

With razor-thin margins in the House and Senate, the GOP can afford precious little dissent if they are going to meet their goals.