President Donald Trump said he would be fine with Republican lawmakers raising taxes on the wealthy, but acknowledged the political challenges of doing so for the party as he prepares to meet with the head of the House tax committee on Friday.

“Republicans should probably not do it, but I’m OK if they do!!!,” Trump said on his social-media platform.

Trump has been pushing lawmakers to increase rates on some of the wealthiest Americans as a way to offset other cuts in an economic package Republicans are preparing to move through Congress. He has also offered mixed messages on his proposal, complicating efforts to finalize the legislation. Higher taxes go against long-standing Republican orthodoxy and could further hamper efforts to move the tax legislation.

The president’s proposal, which he made in a phone call to House Speaker Mike Johnson earlier this week, calls for creating a new 39.6% tax bracket for individuals earning at least $2.5 million, or couples making $5 million, according to people familiar with the discussion.

“The problem with even a ‘TINY’ tax increase for the RICH, which I and all others would graciously accept in order to help the lower and middle income workers, is that the Radical Left Democrat Lunatics would go around screaming,”Read my lips,” Trump added on social media, a reference to former President George H.W. Bush. Bush had courted Republicans in his party’s presidential primary with the pledge on taxes only to agree to a tax increase when in office.

Representative Jason Smith, the chairman of the House tax committee, is expected to meet with Trump Friday and tell him the tax bill will deliver on the president’s priorities, according to a congressional aide.

Raising taxes on the affluent would give the party more breathing room as they look to find ways to pay for the cost of the multitrillion package that aims to renew expiring tax cuts from Trump’s first term and enact additional promises he made on the campaign trail, such as no taxes on tips.

U.S. prosecutors and regulators investigating a $32 million deal between CrowdStrike Holdings Inc. and a technology distributor are probing what senior company executives may have known about it and are examining other transactions made by the cybersecurity firm, according to two people familiar with the matter.

In recent months, investigators with the Justice Department and the Securities and Exchange Commission have been probing the transaction between CrowdStrike and the distributor, Carahsoft Technology Corp., to supply cybersecurity software to the Internal Revenue Service. CrowdStrike has previously said that Carahsoft made on time payments for the order. However, the IRS never purchased or received the products. It remains unclear why the companies struck the deal without an IRS purchase, but Carahsoft previously said it stands by the transaction.

Investigators have questioned former employees about how the deal was struck, what awareness CrowdStrike’s leaders had of it and whether staff raised concerns about other transactions, the people said. Investigators have also obtained internal CrowdStrike records, said the people, who asked not to be named because they aren’t authorized to discuss the matter.

The investigators’ questions suggest the parallel SEC and DOJ probes into CrowdStrike are broader than previously known. 

CrowdStrike spokesperson Brian Merrill said in an email, “As we have stated previously, we stand by the accounting of the transaction.” Carahsoft representatives didn’t respond to calls and emails seeking comment; a lawyer for the company had previously declined to comment on the federal investigations.

Prosecutors from the U.S. Attorney’s Office for the Southern District of New York have taken the lead in questioning several witnesses, the people said. A spokesperson for the Manhattan federal prosecutor’s office, Nicholas Biase, declined to comment, as did SEC spokesperson Cory Jarvis.

Shares of CrowdStrike fell 2.3% in premarket trading on Friday following Bloomberg’s report on the scope of the federal investigations.

Around the time CrowdStrike closed the deal for the IRS, on the last day of a fiscal quarter in 2023, some staff at the Austin, Texas-based company raised concerns that it was “pre-booking” the transaction, Bloomberg previously reported. The employees viewed the deal as incomplete because it was unclear whether the tax agency would ultimately make the purchase.

U.S. regulators have in some cases sued and fined companies over alleged pre-booking, also known as channel stuffing, claiming they misled investors by improperly recognizing revenue to inflate their financial figures.

In interviews starting last fall, prosecutors and regulators have asked whether CrowdStrike employees believed other deals were handled in similar ways, the people said. The investigators have specifically asked about another 2023 transaction involving the IRS that was worth more than $1 million, they said. 

According to one of the people, investigators also inquired about multi-million dollar deals for the Department of Health and Human Services and the Department of Energy.

A CrowdStrike spokesperson, Jeremy Fielding, told Bloomberg in October that a deal for the Department of Energy’s National Nuclear Security Administration was among transactions put through a “second, independent and thorough review” in response to employee concerns. He said the $32 million deal also got “a separate and extensive review,” that each transaction had “non-cancellable order” and that “it is demonstrably false that there was any ‘pre-booking.'”

Among the internal CrowdStrike records that investigators have obtained are employee responses to questionnaires meant to ensure transactions comply with the Sarbanes-Oxley Act, the people said. The law, passed after several accounting scandals in the early 2000s, was intended to reduce corporate fraud by improving financial auditing and public disclosure requirements.

One of these records showed an employee formally expressed concerns that the company handled the $32 million deal inappropriately, one person said. Investigators have also sought detailed information about CrowdStrike’s process for closing the transaction and asked about who in the company’s sales and corporate leadership may have been involved in different aspects of it, the people said.

The transaction was big enough that it could have made the difference between CrowdStrike beating or missing Wall Street projections on two key financial metrics for the quarter in which it closed in 2023. The company has declined to detail to Bloomberg how it accounted for the deal.

Chief Executive Officer George Kurtz highlighted it in an earnings call after markets closed on Nov. 28, 2023, saying, “identity threat protection wins in the quarter included an eight-figure total deal value win in the federal government.” The day after CrowdStrike reported results for the record quarter, its shares rose 10%.

Carahsoft paid CrowdStrike on time for the deal, the cybersecurity firm told Bloomberg last fall.

Both companies said then that they had a “non-cancellable order” between them, but declined to say why they struck the deal without a purchase from the IRS. A purchase order seen by Bloomberg split the purchase into four $8 million payments, with the final payment due at the end of last October.

Last November, CrowdStrike excluded roughly $26 million from the annual recurring revenue in its quarterly earnings report. Chief Financial Officer Burt Podbere said the company determined a transaction wouldn’t be repeated “after a distributor in the federal space provided notice of its intention to exercise transferability rights with respect to a transaction.” CrowdStrike representatives have declined to elaborate. 

President Donald Trump is pushing lawmakers to increase tax rates on some of the wealthiest Americans as a way to offset other cuts in his signature economic package.

The president’s proposal calls for creating a new 39.6% tax bracket for individuals earning at least $2.5 million, or couples making $5 million, according to people familiar with the discussion.

The president made the request in a Wednesday phone call to House Speaker Mike Johnson. He also reiterated his desire to eliminate the carried interest tax break claimed by venture capital and private equity fund managers, one person said. 

Representative Jason Smith, the chairman of the House tax committee, is expected to meet with Trump on Friday and tell him the tax bill will deliver on the president’s priorities, a congressional aide said.

It remains unclear if the proposal would be accompanied by an expansion of the existing exemption for some small business income paid through the individual code. 

If Congress approves Trump’s plan for a 39.6% rate, that would bring the top bracket to a level not seen since before Trump’s 2017 tax cut. The current top rate for individuals is 37%.

Trump has sent mixed signals on raising taxes on the wealthy. He has mused that such a levy could spur rich Americans to relocate to other countries and that it could harm Republicans at the ballot box.

But the proposal comes as lawmakers are struggling to find a way to pay for a multitrillion-dollar package that Trump has dubbed the “one big beautiful bill” to extend his first-term tax cuts. 

Republicans are under increasing pressure to limit the cost of the overall bill because they are struggling to find agreement on cuts to entitlement programs, including Medicaid health coverage for low-income Americans.

Increasing taxes on top-earners gives Republicans more wiggle room to make Trump’s 2017 tax cuts for households permanent and enact some of his campaign pledges, including eliminating levies on tips and overtime pay.

Creating a new tax rate on millionaires would raise $67.3 billion over 10 years, according to a preliminary estimate provided to Bloomberg News by the non-partisan Tax Foundation. The group has previously projected that eliminating tax preferences for carried interest would raise $6.7 billion over a decade.

Raising taxes goes against longstanding Republican orthodoxy. Trump’s willingness to propose a tax hike for millionaires demonstrates how much he has remade the GOP in his own populist image. 

Commerce Secretary Howard Lutnick told Bloomberg Television that higher taxes on the wealthy is a “smart” move to free up more money to pay for Trump’s campaign proposals to cut taxes for hospitality workers and seniors.

However, top Republicans have balked at other proposals that would raise levies on affluent households.

Representative Kevin Hern, an Oklahoma Republican on the House tax committee, said increasing the top rate and eliminating carried interest are under discussion but there is no agreement yet.

“Anytime the president asks for something, we will consider it,” he said.

Senator Mike Crapo, who leads the Senate Finance Committee, told conservative radio host Hugh Hewitt on Thursday that he’s “not excited” about the proposal to raise taxes, but there are a “number of people in both the House and the Senate who are.” 

“If the president weighs in in favor of it, then that’s going to be a big factor that we have to take into consideration,” Crapo said.