Trump reverses course, says he's not considering tax cuts, because of 'strong economy'

Key Points
  • President Donald Trump says he's not currently looking at a payroll tax cut or indexing capital gains to inflation.
  • The comments follow several days of mixed messaging from his administration about whether or how it will respond to growing recession fears.
  • Trump says the U.S. does not "need" tax cuts, because of a "strong economy."
President Trump reverses course on tax cuts
President Trump reverses course on tax cuts

President Donald Trump insisted Wednesday that his administration will not cut taxes to turn aside an economic slowdown — only a day after he said he would consider tax policy changes.

It follows several days of mixed messaging from the White House on whether it would respond to growing concerns about a potential recession. Trump has spent the week arguing the U.S. has the strongest economy in the world — while urging the Federal Reserve to chop interest rates, a step typically taken during cycles of economic weakness.

A White House official first denied a report Monday that the administration would consider a payroll tax reduction. By Tuesday, Trump said he was "thinking about" cutting the levies — though he stressed that "whether or not we do something now, it's not being done because of a recession."

But the president backtracked on Wednesday, tamping down talk about either trimming payroll taxes or indexing capital gains to inflation. Trump's comments continue the president and his administration's struggle to clarify whether and how it would change U.S. tax policy in the face of recession fears.

"I'm not looking at a tax cut now. We don't need it. We have a strong economy," the president told reporters on the White House lawn when asked if he would consider a payroll tax cut.

President Trump: The Fed raised rates 'too fast, too furious'
President Trump: The Fed raised rates 'too fast, too furious'

Only Tuesday, Trump said he was "thinking about" indexing capital gains to inflation — a move generally expected to reduce the tax burden on wealthy people. But he added he was "not talking about doing anything at this moment."

On Wednesday, he criticized the proposal, saying "it's not something I love."

"It's probably better for the high-income people, and I'm not looking to do that. I want to do for the workers," the president said.

Trump's stance on the tax changes shifted overnight because his staff briefed him on how much of a stir his comments Tuesday caused, CNBC's Eamon Javers reported. The president aimed to reduce speculation about tax policy Wednesday.

Javers tweet: I'm told the reason for President Trump's 180 on taxes today is that staff briefed him on how widely his comments yesterday were picked up and how much speculation they set off. So the president went out to the South Lawn today determined to shut down the tax speculation frenzy.

The comments Wednesday show a president fixated on maintaining the strength of the U.S. economy, while eager to push the blame for any potential downturn to others. He hammered Fed Chairman Jerome Powell several times Wednesday for hiking interest rates in 2017 and 2018, comparing him to a golfer "who can't putt."

He also made the unfounded claim that media outlets are "trying to convince the public to have a recession."

Trump lamented that his predecessor President Barack Obama oversaw the economy when the Fed had set near-zero interest rates — an emergency response during the recovery from the 2008 financial crisis.

"Despite that, I have a much stronger economy," he said.

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