Republicans are weighing a major shift in tax policy by debating whether to allow the top income tax rate to rise when parts of the 2017 Trump tax law expire later this year. In private Senate discussions over how to finance a sweeping GOP agenda bill—which includes added funding for immigration enforcement and defense—lawmakers have floated letting the rate for top earners revert from 37% back to 39.6%.

Sen. Kevin Cramer called the conversation “interesting,” noting the party’s shift toward populist thinking. He asked rhetorically why Republicans have worried so much about protecting the wealthy from taxes and said the party’s evolving base demands a new outlook—even “among those of us with powdered wigs.”

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The GOP’s electoral landscape has changed dramatically. While voters earning over $100,000 backed Mitt Romney by 10 points in 2012, they supported Kamala Harris over Donald Trump by four points in 2024. Meanwhile, voters making under $50,000 swung from Barack Obama in 2012 to Trump last year.

Sen. Mike Crapo, who chairs the Senate Finance Committee, said he’s open to discussions but hasn’t taken a position. Sen. Chuck Grassley confirmed at a town hall that raising the top rate is on a “working sheet” of options. Meanwhile, former Trump adviser Steve Bannon, unprompted during an unrelated interview, called for higher taxes on the wealthy as part of a populist realignment.

Not everyone agrees. Sen. Ted Cruz rejected the idea outright, telling NBC News, “I don’t believe Republicans are going to do that.” House Majority Leader Steve Scalise said on Fox Business, “I don’t support that initiative.” Sen. John Cornyn warned that small businesses could be harmed if their income is taxed at higher personal rates, though he said carve-outs could be considered.

Within Trump’s orbit, the divide is clear. Populist figures support tax hikes on the rich, while traditional conservatives defend across-the-board cuts. Republican pollster John McLaughlin warned that letting the 2017 cuts expire would amount to “the largest tax increase ever of over $4 trillion” and could cost the party control of Congress. He said in an interview that if the economy slows, “it’s very difficult to win elections,” pointing to low GOP turnout in Wisconsin and Florida.

Sen. John Thune confirmed the idea has “been discussed” and stressed the need for coordination with the House and White House. Sen. Thom Tillis said he’s not quoting numbers but supports finding room in the budget, while Sen. Mike Rounds questioned whether letting the rate rise automatically even counts as a tax increase.