The Trump administration is reportedly weighing the possibility of letting the 2017 tax cuts lapse for the wealthiest Americans as a potential way to finance former President Donald Trump’s campaign promise to eliminate taxes on tips, according to a report from Axios.
As outlined in the report, the proposal would raise the top income tax rate from its current level of 37% back to the 39.6% rate that existed before 2018. Additionally, it would reduce the income threshold for that rate, which currently starts at $609,351 for single filers and $731,201 for married couples.
Trump initially announced his plan to end federal taxes on gratuities at a Las Vegas campaign rally in June of last year.
Still, the Committee for a Responsible Federal Budget, a nonpartisan watchdog group, warned on Thursday that this and other proposed policies — including extending Trump’s hallmark 2017 tax reforms — could add $11 trillion to the national debt over the coming ten years.
Reverting to the tax structure implemented during President Bill Clinton’s administration for high earners would help pay for Trump’s tip-related proposal, though Axios noted the report does not specify how much revenue such a change would generate.
Moreover, the move could undercut Democratic claims that Trump and the Department of Government Efficiency are primarily trimming government in order to deliver tax cuts to the ultra-wealthy, according to the outlet.
Officials from the White House told Axios that the idea is still in the early stages of internal discussion.
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