United States President Donald Trump has warned on Wednesday that raising the top income tax rate to 40% could push wealthy Americans to leave the country.
“It would be very disruptive because the millionaires would leave,” he said to reporters in the Oval Office. “Other countries that have done it have lost a lot of people. They lose their wealthy people. That will be bad because the wealthy people pay the tax.”
Donald Trump’s comment comes as some GOP lawmakers consider a 40% annual tax on income above $1 million to help cover an economic plan that also seeks to remove taxes on tips and overtime pay. Supporters say the idea could blunt Democratic claims that Republicans favor the rich over low-income families.
House Speaker Mike Johnson was also not in favor of the move. “I’m not in favor of raising the tax rates,” Johnson said on Fox News earlier Wednesday, adding that he does not “expect” a Republican bill to include higher income taxes on millionaires. “Our party is the party that stands against that traditionally.” Anti-tax groups inside the party have already mobilized. On Tuesday, former speaker Newt Gingrich said on X that he had received a message from Donald Trump arguing that higher rates could hurt Republican candidates at the polls.
Donald Trump fears wealth migration as lawmakers predict $400 billion generation from tax in 10 years
Despite that, some lawmakers see the proposal as a budget tool. Non-government estimates suggest a 40% rate on income beyond $1 million would generate roughly $400 billion over 10 years—money planners say could add about $500 a year to the child taxation credit.
The current top income rate is 37%, a level set by the taxation law signed by Trump in 2017. Unless Congress acts, that rate will drop to 39.6% when the individual provisions of that law lapse at the end of 2025. Members will also return to Washington next week to discuss the details of the bigger package, with Johnson pledging to send a measure through the House by the end of May.
The debate comes as Republicans seek a message before the November midterm elections. Backers of the millionaire bracket argue that a targeted increase could undercut attacks that the party plans to trim social programs to finance cuts elsewhere. Critics say that opening the door to higher rates will encourage wealth migration. Whether the 40% idea survives the closed-door talks is now dependent on how strongly Trump’s warning resonates–and on how leaders settle on ways to fund their agenda.