President Donald Trump pushes for a new tax reform bill: expects economic growth and criticizes the Federal Reserve for its slow policy
On May 9, 2025, U.S. President Trump promoted a new tax reform bill, with plans to increase taxes on high-income earners to finance tax cuts for the middle and working classes, continuing the policies of his first term. Trump referred to this bill as a "big and beautiful bill," anticipating it will stimulate economic growth and urged investors to invest in U.S. stocks. He criticized Federal Reserve Chairman Powell for failing to lower interest rates promptly, calling his actions sluggish and detrimental to the coordination of economic policies.
Key Updates
05/09 11:04
President Donald Trump pushes for a new tax reform bill: expects economic growth and criticizes the Federal Reserve for its slow policy
On May 9, 2025, U.S. President Trump promoted a new tax reform bill, with plans to increase taxes on high-income earners to finance tax cuts for the middle and working classes, continuing the policies of his first term. Trump referred to this bill as a "big and beautiful bill," anticipating it will stimulate economic growth and urged investors to invest in U.S. stocks. He criticized Federal Reserve Chairman Powell for failing to lower interest rates promptly, calling his actions sluggish and detrimental to the coordination of economic policies.
Content and Goals of the Tax Reform Bill
According to multiple media reports, the Trump administration is planning a new tax reform bill, with key elements including a new tax rate of 39.6% for individuals earning over $2.5 million annually (or couples filing jointly with income over $5 million), an increase from the current 37%. This move would return the top tax rate to the level before the 2017 Tax Cuts and Jobs Act (TCJA) was implemented.
Additionally, Trump reiterated his desire to eliminate the "carried interest tax advantage" enjoyed by venture capital and private equity fund managers. According to estimates by the nonpartisan think tank Tax Foundation, these two measures could increase federal revenue by approximately $74 billion over the next decade.
Trump stated that this additional revenue would be used to continue his first-term tax cuts for families and promote new tax incentives, including tax exemptions for tips, overtime pay, and Social Security benefits. He emphasized that these measures would benefit the middle and working classes and avoid cuts to social welfare programs like Medicaid.
Reactions Within the Party and Policy Positioning
Although Trump's proposal has sparked controversy within parts of the Republican Party, particularly among conservatives opposed to tax increases, Trump's influence within the party remains significant. Senate Finance Committee Chairman Mike Crapo stated that while he personally is "not interested" in raising taxes, the president's stance will be an important consideration.
Secretary of Commerce Howard Lutnick expressed support, believing that the tax increase policy would help provide stable funding for the tax relief measures proposed by Trump. Trump's advisor Newt Gingrich also revealed that the president has a positive attitude towards the idea of a "slight tax increase," but acknowledged that this could politically pressure the Republican Party.
Trump's Optimistic Economic Forecast
In multiple public speeches, Trump emphasized that if the tax reform bill passes smoothly, along with recent trade agreements signed with countries like the UK, the U.S. economy will enter a new phase of rapid growth. He described the bill as "the largest tax cut measure ever," covering corporate investment deductions and helping to deepen economic and trade cooperation with international partners.
At a White House press conference, Trump repeatedly urged investors to "buy stocks now," stating that "this country will soar like a rocket," predicting numbers "no one has ever seen." He pointed out that the stock market will benefit from policy dividends, increased corporate profits, and an investment boom.
Trump also posted on Truth Social to calm market sentiment, emphasizing that "everything will get better, and America will be better and stronger than ever," hinting that "now is the best time to buy."
Criticism of Fed Chair Powell
In terms of monetary policy, Trump expressed strong dissatisfaction with Fed Chair Jerome Powell. He criticized Powell for "standing still" while other major central banks were cutting interest rates, giving him the nickname "Slowpoke Powell," and described conversations with him as "like talking to a wall."
Trump believes the Fed should align with the administration's economic policies and adjust interest rates in a timely manner to stimulate the economy. He posted on Truth Social calling Powell a "dummy" with "no clue," pointing out that oil, energy, and food prices have significantly dropped, and that "inflation doesn't exist."
Despite Trump's repeated pressure to cut interest rates, Powell reiterated the Fed's independence at a press conference, stating that decisions will be based on economic data and risk assessments, free from political interference. He noted that economic prospects remain uncertain, particularly the potential impact of tariff policies on inflation and employment, and that the Fed will make decisions once the situation becomes clearer.
