Washington Edition: A taxing situation

I’m Nancy Cook, Bloomberg’s senior national political correspondent, and each weekday I’ll be coming to you with inside-the-room reporting and insights that reveal what’s really happening in Washington — and how it impacts you. Email me with feedback and comments here. If this newsletter was forwarded to you, sign up here.

Seasonal Message

While President Donald Trump and Republicans are out promoting their tax cuts, a raft of Democratic politicians are talking about raising taxes — at least on the very rich.

The same week millions of Americans filed their taxes, Senate candidate James Talarico in Texas laid out proposals to close tax loopholes used by the ultrawealthy, and fellow Democrat Graham Platner in Maine called for a wealth tax on billionaires. In New York, Governor Kathy Hochul introduced a plan to tax second homes worth at least $5 million.

Photographer: Sofia Aldinio/Bloomberg

It’s hardly a new idea in Democratic circles. The idea of taxing the rich has been a staple on the platforms of progressives like Senators Bernie Sanders and Elizabeth Warren.

And it’s not just tax hikes. Senators Cory Booker and Chris Van Hollen recently rolled out their own plans to drastically slash taxes for working-class Americans while also raising taxes on the rich, as outlined here by Bloomberg Government’s Chris Cioffi. 

Progressive Democrats have been talking about raising taxes on the rich and using the revenue to strengthen the social safety net for years. They’ve had little to show for it. 

But the idea is gaining traction across the party. Sticking it to the rich, combined with cutting taxes for middle-income families, may be a particularly appealing message in this midterm election year as many Americans struggle with the high cost of health care, housing, gas and groceries.

Even Trump seriously considered raising taxes on those earning $1 million or more annually as his aides and congressional Republicans worked on their tax-cut bill. He broke all GOP orthodoxy by even mentioning it. 

In the end, he dropped the idea after hearing from some outraged Wall Street donors and Republican lawmakers. The tax cuts that did pass last year are supposed to be the centerpiece of the 2026 Republican congressional campaigns.

Trump is traveling to Nevada today and Arizona tomorrow to highlight provisions of the tax law, particularly the new deductions for tips and overtime wages. (There’s always a chance that message gets sidelined by the president wandering into other issues.) 

Heading into November, Democrats see an opening to beat Trump at his own game on taxes. The GOP tax bill has not been as big a win with voters that Republicans assumed it would be — and the administration has struggled with its efforts to sell it. It’s become even harder as modestly larger tax refunds get eaten up by higher gasoline costs caused by the war with Iran.

Liberals are picking up and re-assembling their own collage of tax ideas, many of which are derivative of Warren’s work or positions floated under former President Joe Biden (whose administration had a large contingent of ex-Warren staffers). They are putting a 2026 spin on it, as Democrats try to make sure the midterms are a referendum on Trump and Republicans’ handling of the economy.

As the old saying goes, the only certainties in life are death and (especially in election years) taxes.

Today’s Top News

The US government is preparing to make a version of Anthropic’s powerful new artificial intelligence model, Mythos, available to major federal agencies amid concerns that the tool could sharply increase cybersecurity risk.

Trump said prospects for a deal with Iran are “looking very good” with concessions from Iran as the two sides are in discussions to extend a truce ahead of its expiration next week.

Pre-war planning meant Iran’s military was able to mitigate the impact of US-Israeli strikes on its weapons arsenal and retains the ability to respond if the ceasefire fails, according to Western military intelligence assessments.

From the White House to the statehouse, many politicians who’ve been cheerleading the data-center boom are now trying to defuse a growing backlash ahead of midterm elections.

A Minnesota prosecutor charged an immigration officer with two counts of second-degree assault after he pointed his duty weapon at two motorists, in what officials described as the first state criminal charge against a federal agent stemming from Operation Metro Surge.

A pair of wealthy donors is giving National Public Radio $113 million to invest in its long-term infrastructure as the media network grapples with funding cuts from the Trump administration.

Health and Human Services Secretary Robert F. Kennedy Jr. acknowledged that vaccination may have saved the 6-year-old Texas child who died from measles last year.

Trump said he’s nominating former Deputy Surgeon General Erica Schwartz to lead the Centers for Disease Control and Prevention.

The US Commission of Fine Arts voted to approve the concept for Trump’s “Triumphal Arch,” which will rise 250 feet in the sky near Arlington National Cemetery, but didn’t fast-track the project for final approval.

Photographer: Courtesy of Harrison Design

The former lieutenant governor of Virginia, Justin Fairfax, killed himself and his wife, Cerina Fairfax, at their home, according to the police.

Must Reads From Bloomberg Government

A federal judge barred Trump from moving forward with above-ground work on a 90,000-square foot White House ballroom, rejecting administration arguments that the entire project was essential to national security.

Immigration enforcement agencies are grounding equipment and facing gaps in investigative work as the Homeland Security Department funding lapse prevents them from paying contractors, top officials told lawmakers.

House Republicans remain at loggerheads over reauthorizing a key spy powers tool ahead of an April 20 deadline, with lawmakers negotiating possible changes to the program and weighing a short-term patch to avoid its expiration.

Watch & Listen

Today on Bloomberg Television’s Balance of Power early edition at 1 p.m., hosts Joe Mathieu and Kailey Leinz interviewed Democratic Senator Catherine Cortez Masto about Trump’s visit to her home state of Nevada, the conflict in the Middle East and the fight for the Federal Reserve’s independence.

On the program at 5 p.m., they talk with Democratic Representative Sarah Elfreth of Maryland about today’s action in Congress and the wrangling over funding the war with Iran.

On the Odd Lots podcast, Bloomberg’s Tracy Alloway and Joe Weisenthal speak with Brad Setser, the Whitney Shepardson senior fellow at the Council on Foreign Relations, about how the Iran war is already creating new global imbalances, and the degree to which this episode parallels past energy shocks. Listen on iHeart, Apple Podcasts and Spotify.

Chart of the Day

Factory output in the US snapped back in the first quarter of the year after disappointing at the end of 2025, with the advance extending beyond the artificial intelligence build-out. Federal Reserve data shows manufacturing production excluding high-technology industries, such as computers and semiconductors, grew at an annualized 2.8%. That’s one of the healthiest paces since 2021, when the economy was shifting back into gear following the pandemic. Machinery, motor vehicles, mineral products and electrical equipment were among the industries with sizable increases in output. — Vince Golle

What’s Next

Trump heads to Arizona tomorrow to promote his tax law.

Virginia voters will decide whether to back a redrawing the state’s congressional districts on Tuesday.

Retail sales for March will be reported Tuesday.

Pending home sales in March also will be reported Tuesday.

King Charles is scheduled to make his first state visit to the US the week of April 27.

The Florida legislature special session on redistricting was delayed until April 28.

More From Bloomberg

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• Morning Briefing Americas for catching up on everything you need to know

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