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Trump Considers New Tax Cut for Middle Class, Blasts Fed After Investors Rattled by Recession Fears

08-20-2019
(AP Photo/Evan Vucci)

President Trump is saying the economy is strong, but he thinks it could be stronger.

White House officials are discussing further actions to spur the economy, including a cut in the payroll tax to help the middle class.

Right now millions of Americans pay a 6.2% payroll tax on their earnings. That tax was last cut in 2011 and 2012 by about two percent. To put things into persepctive, a person who made $50,000 could get an extra $83 bucks a month back.

Cutting payroll taxes may help the middle class, but critics say they could harm the viability of safety net programs they fund, like Social Security, adding to the federal deficit in the process.

But talks are in the early stages and additional tax cuts are still on the agenda for discussion.

And after investors were rattled last week by fears about a possible recession on the horizon, the president is criticizing Federal Reserve Chairman Jerome Powell, calling him 'clueless' and lacking in vision. 

"We should easily be reaping big Rewards & Gains, but the Fed is holding us back. We will Win!"

President Trump called on the Federal Reserve to lower interest rates by a full point.

"We're doing tremendously well. Our consumers are rich, I gave a tremendous tax cut, and they're loaded up with money. I think I could be helped out by the Fed. But the Fed doesn't like helping me too much," the president tweeted.

A survey by the National Association for Business Economics (NABE) shows 75 percent of economists believe there will be a recession by 2021. 

The poll requested panelists' opinions on the impacts from the president's comments. 

Fifty-five percent believe the president's remarks do not influence the Fed's decisions but do jeopardize the public's trust in the bank. 

Twenty-seven percent suggest the president's comments cause the bank to be more amicable, and seven percent see Trump's remarks in a more positive light.

Still, the majority of respondents believe such comments encourage public debate and serve as a check on the central bank's decisions.
 

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