• Trump suggests a tax hike for Americans earning over $2.5 million.
• Proposed top income tax rate would increase from 37% to 39.6%.
• The proposal faces opposition from many Republican lawmakers.
• Tax increase aimed to help fund middle-class tax cuts and protect Medicaid.
• Concerns exist about the political repercussions of raising taxes.

President Donald Trump is pushing for a tax increase on the wealthiest Americans as part of a significant budget package being prepared by House Republicans. He has reportedly suggested to House Speaker Mike Johnson that a new top income tax bracket be created for those earning more than $2.5 million, with rates reverting from the current 37% to 39.6%. This approach would roll back provisions from the Tax Cuts and Jobs Act of 2017, which had initially lowered the top rate to 37%, according to The Hill and New York Times.

Recently, Trump emphasized that this tax increase could effectively underwrite substantial tax cuts for the middle and working classes, as well as safeguard Medicaid funding. Insiders revealed that Trump communicated this proposal directly to Johnson, aiming to reshape GOP fiscal strategy amidst growing concerns over the optics of cutting benefits for the low-income demographic while providing tax breaks for the rich, HuffPost and Newsweek reported.

However, there is significant resistance among Republican leaders regarding the proposed tax hike. Speaker Johnson has expressed his opposition to increasing taxes, as it contradicts the party's long-standing support for tax cuts. This apprehension is compounded by Trump's own previous remarks against such a tax increase, in which he warned of negative political fallout, citing historical precedents from previous Republican administrations, as noted in Reuters.

Despite the pushback, there are indications of a slight shift in some Republican positions, with a few expressing that hiking the top marginal rate could be beneficial. Senator Josh Hawley suggested that the focus should shift toward tax relief for working people, while moderate Republicans are wary of the implications of significant Medicaid cuts required to offset the cost of continued tax cuts, HuffPost and Newsweek.

As this debate unfolds, Trump's stance presents a curious juxtaposition to typical Republican doctrine, highlighting a potential rift within the party as they prepare their budget plans amidst the pressures of securing working-class support while also catering to their wealthiest constituents, according to The Hill, New York Times, HuffPost, Newsweek, and Reuters.