‘Millionaires Will Leave’: Trump Warns 40 % Top Tax Rate Would Drive Wealth Overseas

Millionaire Tax Idea Meets Resistance At The Top

A fresh rift has opened inside the US’s Republican Party, also known as the Grand Old Party (GOP), over a plan to raise the country’s top income‑tax band from 37 percent to 40 percent on earnings above USD 1 million.

President Donald Trump warned that such a move would prompt “the millionaires [to] leave,” arguing in the Oval Office that higher‑earning Americans could simply relocate overseas.

He said,

“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.”

Why Target Millionaires Now

Some Republican lawmakers want the extra three‑percentage‑point levy to bankroll an economic package that also promises to scrap taxes on tips and overtime pay.

Supporters contend the offer could soften claims that the party protects the affluent at the expense of low‑income households.

Additionally, a higher tax on the wealthy could help Republicans deflect accusations that they favour the rich.

Independent projections suggest the higher rate could raise roughly USD 400 billion over 10 years—enough to add about USD 500 a year to the child tax credit.

Johnson Says No While Activists Mobilise

House Speaker Mike Johnson signalled scant enthusiasm.

He told Fox News,

“I’m not in favour of raising the tax rates.”

He also added that he does not “expect” a Republican bill to include the millionaire bracket.

Anti‑tax groups moved quickly; former Speaker Newt Gingrich posted on X that he had received a message from Mr Trump warning the rise could hurt GOP candidates.

Numbers Facing A Deadline

The current 37 percent ceiling was set by Mr Trump’s 2017 law but will automatically revert to 39.6 percent when personal provisions expire on 31 December 2025.

Lawmakers return to Washington next week to draft the broader package, and Mr Johnson aims to push a bill through the House by the end of May.

Can The GOP Square The Ledger

Republicans are juggling plans that would deliver between USD 4.5 trillion and USD 5.8 trillion in combined tax cuts and spending increases—including defence and border priorities—over a decade.

On the House side alone, at least USD 1.5 trillion in spending reductions are under discussion.

Fiscal hawks warn of ballooning deficits, while moderates balk at deep social‑programme cuts.

Last year’s federal deficit reached USD 1.8 trillion.

MAGA Populists Open To Higher Rates

A populist strand inside the party has flirted with taxing the rich to fund the agenda.

Steve Bannon recently told “Real Time with Bill Maher” that “Trump and the MAGA movement will raise taxes on the wealthy.”

Yet GOP leaders remain sceptical.

Mr Johnson reiterated that he do not expect that a Republican bill would include higher income taxes on millionaires,

“Our party is the group that stands against that traditionally.”

Will the 40% Millionaire Tax Survive the Debate?

As lawmakers return to Washington next week to deliberate on the proposed tax changes, the fate of the 40 percent millionaire tax remains uncertain.

The discussion will likely hinge on how Trump's warning resonates among GOP leaders and whether they can find alternative revenue to fund their sprawling agenda while keeping campaign pledges like “no taxes on tips” alive, all without alienating key parts of their voter base.