Trump, Who Advocated Tax Cuts, Proposes Tax Increase for Top Earners Over 3.5 Billion KRW Annually

37%→39.6% Tax Rate Increase

"To Be Used for Worker and Middle-Class Tax Cuts"

Donald Trump, the U.S. President who promised large-scale tax cuts during the election, has proposed a tax increase for the ultra-wealthy.

Bloomberg News and Reuters reported on the 8th (local time) that as the U.S. Congress, led by the Republican Party, discusses the issue of processing the tax cut bill, President Trump has asked the Republican congressional leadership to increase taxes on the highest earners.

President Trump conveyed this position to Mike Johnson, the Speaker of the House from the Republican Party, the previous day. Sources reported that Trump's proposal includes creating a new tax bracket for individuals with an annual income of over $2.5 million (about 3.5 billion KRW) or couples with a combined income of over $5 million, and imposing a 39.6% tax. The current top personal income tax rate is 37%.

Previously, President Trump, a real estate mogul, had pledged large-scale tax cuts during the election. Accordingly, the Republican Party, the majority in both the House and Senate, is pushing for the extension of the existing tax cuts before the Trump tax cuts expire at the end of this year, along with a so-called 'one big beautiful bill' that includes tax exemptions for tips and overtime pay.

Bloomberg News reported that the Republican Party plans to pass the bill in the House by the end of this month, but is facing difficulties in reaching an internal agreement due to disagreements over Medicaid (low-income health insurance) cuts, which are intertwined with hardliners' demands for government spending cuts. As a result, U.S. media have assessed that Trump's proposal for a tax increase on the ultra-wealthy could create additional room for discussion related to the progress of tax cut discussions.

A Trump administration official told the internet media Axios, "This will be used for the promised tax cuts for the working class and middle class and will protect Medicaid." Trump's billionaire tax proposal is also interpreted as an attempt to avoid criticism that the so-called 'MAGA (Make America Great Again)' policy only benefits the wealthy.

Reporter Park Subin, Hankyung.com waterbean@hankyung.com