GOP Senator McCormick Says Millionaire Tax Hike Won’t Fly (1)

Republican Senator Dave McCormick predicted a higher tax rate on millionaires won’t fly with the GOP-controlled Congress, throwing cold water on a proposal gaining support in the White House and among some of his fellow lawmakers.

“I don’t think that’s likely to happen,” the former Bridgewater Associates chief executive said Wednesday in a Bloomberg Television interview.

President Donald Trump is seriously considering ideas to raise taxes on the rich as a way to partially offset revenue losses from his tax package, according to a White House official. That includes a House proposal that would set a new, higher tax rate of 40% on annual income above $1 million.

The fact that Republicans are even considering raising taxes on the rich is a testament to the increasing populist influence in a party that typically rejected such ideas as class warfare.

It’s a tax hike that would have directly affected McCormick in his prior role as a hedge fund CEO. The newly elected Pennsylvania senator reported earning $22.5 million in salary from Bridgewater in 2021 and early 2022, the year he left the company.

McCormick, whose roots in the party establishment extend back to a senior role in George W. Bush’s Treasury Department, said Congress should stick to cutting federal spending as it looks for ways to offset tax cuts.

“We’ve got to reel in the spending,” McCormick said. “That’s going to require some tough choices. But we can’t do that by raising taxes, which slows the economy and hurts working families.”

Some Republican lawmakers are resisting proposed curbs to Medicaid health coverage for the poor and disabled, food stamps and other social programs. Senate Republicans have deployed a new budget gimmick to hide the full cost of the taxes, allowing them to be financed through debt. That in turn has provoked a backlash from House GOP deficit hawks.

Read more: Millionaire Tax Hike Gains Steam as Trump Signals Openness

While Republicans control both the House and Senate, their majorities are slim. Party leaders need nearly every GOP lawmaker to vote for the tax package.

The millionaire’s tax under consideration would add a new tax bracket on top of the current maximum rate of 37% for individuals earning more than $626,350 a year.

McCormick also said it will be important for Trump to roll out a series of trade deals in the coming weeks to stabilize the economy amid volatility from the tariff conflicts the president initiated.

“I think that’ll be a calming force,” McCormick said. “Business leaders are trying to make investment decisions, and they hate uncertainty.”

(Updates the fifth paragraph with McCormick’s Bridgewater salary)

--With assistance from Erik Wasson.

To contact the reporters on this story:
Alicia Diaz in Washington at adiaz243@bloomberg.net;
David Westin in New York at dwestin@bloomberg.net

To contact the editors responsible for this story:
Megan Scully at mscully32@bloomberg.net

Mike Dorning

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