President Donald Trump on Wednesday backed off his public support for a payroll tax cut or a reduction in capital gains taxes, just 24 hours after saying he would “love to do something” on both fronts.
“I’m not looking at a tax cut now,” Trump told reporters on Wednesday as he prepared to leave town for a veterans event.
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White House officials in recent days have been discussing a broad package of measures to reduce the risk of an election year recession. The proposals include a cut of 1 or 2 percentage points in the corporate tax rate, a payroll tax cut and a move to index capital gains to inflation, which potentially could be done through an executive order.
But on Wednesday, Trump insisted such moves are not on the table, saying he thinks the U.S. ecocomy is strong and that indexing capital gains is “not something I love” because it would be perceived as only for the rich.
“I’m not looking to do indexing,” Trump said. “If I wanted to do it, I believe I could. But I would need a letter from the attorney general.”
Just one day earlier, he said the White House was considering indexing capital gains “directly by me.”
But on Wednesday, Trump said the tax move wasn’t necessary because “we don’t need it” and the U.S. has a “strong economy.”
The president has engaged in a monthslong war with the Federal Reserve over what he sees as its inaction to address a weakening economy. He has previously said the Fed has “horrendous lack of vision” and is “my biggest threat.” He has also called the Fed “dummies who sit back and politely watch as other countries continue to play their games.”
On Wednesday, he continued his attacks, complaining that his handpicked Federal Reserve chair, Jerome Powell, “raised rates too fast, too furious.” He denied demanding that Powell lower interest rates but added “if [Powell] used his head he would lower them.”
Despite increasing fears of a recession, Trump vehemently disavowed any suggestion that the economy is sliding downward. “Let’s have a recession,” he said. “The United States is doing phenomenally well.”
He pivoted to his next point, however, blaming China for “ripping” $500 billion out of the U.S.
China has been one of Trump’s favorite punching bags as president, but critics argue that Trump’s trade war with China contributes to the unstable economy. A report by JPMorgan Chase released this month estimated that the trade war will cost the average American household $1,000 per year if Trump follows through with his plan to impose an additional $300 billion worth of tariffs on U.S. imports from China.