President Trump on Wednesday backtracked on his interest in a set of tax cuts he had just one day earlier said the White House was discussing.
“I’m not looking at a tax cut now,” he told reporters before leaving the White House to travel to Kentucky. “We don’t need it. We have a strong economy.”
{mosads}Trump’s remarks on Wednesday contrast with comments he made on Tuesday, when he said he was looking at a temporary payroll tax cut and suggested indexing capital gains to inflation, lowering the tax burden for investors.
“We’re looking at various tax reductions. But I’m looking at that all the time anyway,” he said at the time.
On Wednesday Trump moved away from that position, saying he’s not looking to make the change to capital gains taxes because doing so is “probably better” for upper-income earners and he wants to help the middle class.
“I’m not looking to do indexing,” he said. “I’ve studied indexing for a long time. I think it will be perceived if I do it as somewhat elitist. I don’t want to do that.”
He added that if he wanted to unilaterally index capital gains to inflation, he thinks he could do so, but would need a letter from the attorney general.
In 1992, the Justice Department’s Office of Legal Counsel ruled that capital gains couldn’t be indexed through regulation. Conservatives who want Trump to index capital gains argue that he has the authority to do it because the Supreme Court has since ruled in a telecommunications case that the term “cost” is ambiguous. But Democrats continue to believe that Trump doesn’t have the authority to unilaterally index capital gains and such a change would require congressional action.
Trump’s contradictory comments on taxes this week come amid signs that a recession could be nearing. The president and his aides have been publicly dismissing the notion that a recession might be on the horizon. But The Washington Post and The New York Times reported on Monday that White House officials were looking at the payroll tax cut in an effort to counter an economic slowdown.