President Donald Trump said he is “thinking about” a payroll tax cut after all, less than a day after the White House denied a Washington Post report that said the cut is under consideration to help boost a slowing economy.
“Payroll tax is something we think about, and a lot of people would like to see that, and that very much affects the workers of our country,” Trump told reporters at the White House late Tuesday. However, Trump said, “whether we do something now, it’s not being done because of recession.”
Trump’s admission was a quick departure from a statement given to CNBC earlier Tuesday, as we covered here on Money and Markets.
“As Larry Kudlow said yesterday, more tax cuts for the American people are certainly on the table, but cutting payroll taxes is not something under consideration at this time,” an unnamed official said in a statement to CNBC.
Trump has rightfully pushed back against claims that the economy is on the brink of recession. The inversion of the yield curve on the 10-year and 2-year Treasurys, in addition to record-low yields, has had investors fleeing the market, and we’ve seen two of the worst days of trading this year happen in the past two weeks.
Trump also accused Democrats of “trying to ‘will’ the Economy to be bad for purposes of the 2020 election” in a tweet earlier this week.
“I think the word recession is a word that’s inappropriate because it’s just a word that certain people, I’m going to be kind, certain people and the media are trying to build up because they would love to see a recession,” Trump said Tuesday in the Oval Office, according to CNBC. “We are very far from a recession.”
Trump mentioned he has a few tricks up his sleeve to stimulate the economy. He slammed his favorite whipping boy, the Federal Reserve again, and mentioned the payroll tax cut and indexing capital-gains taxes to inflation.
“I’m not talking about doing anything at this moment, but indexing is something a lot of people have liked for a long time,” Trump said. “It is something I’m thinking about.”
Of course, any type of new tax cut would face strong opposition in the Democratic-led House of Representatives, and the payroll tax helps fund Social Security and Medicare, two programs already facing funding shortfalls in the not-too-distant future.