President Trump just confirmed he is considering a huge middle tax cut. During a question and answer session with the media, Trump said he is the White House is considering a temporary payroll tax cut.
These types of tax cuts tend to benefit the middle class more and deliver an immediate increase to their take-home pay.
Trump also mentioned he may employ indexing as a tactic if he believes the economy needs it – indexing is something he can do alone while cutting payroll taxes usually requires Congress to go along.
From The Hill: “I’ve been thinking about payroll taxes for a long time. Many people would like to see that,” Trump told reporters in the Oval Office during a meeting with the Romanian president.
He added that the administration is also looking at doing something on the capital gains tax, but cautioned that nothing has been decided.
The White House on Monday and earlier Tuesday denied reports that a temporary payroll tax cut was being discussed as one way to boost the economy amid anxieties of a looming recession.
But Trump confirmed that the strategy has been floated, and suggested he could bypass Congress, though it’s unclear how he would do so.
People pay payroll taxes in order to finance Social Security and Medicare. Former President Obama had enacted a temporary payroll tax cut during his presidency in an effort to boost the economy.
Cutting those taxes could temporarily help the middle class, but could also increase the deficit and possibly hurt the social safety net programs they fund.