Revenue and Expenditure Control Act of 1968

Revenue and Expenditure Control Act of 1968

Lyndon Johnson on June 28, 1968

The Revenue and Expenditure Control Act of 1968 is a United States law that created a temporary 10 percent

, causing them to end in 1973 instead of 1969. President Lyndon Johnson signed the legislation into law on June 28, 1968.

Though the act imposed a 10 percent surcharge overall, Johnson noted its limited effects on some, saying just before signing the bill, "A family of four earning less than $5,000 ($43,809 in 2023 dollars) would pay nothing additional. A family making $10,000 ($87,617 in 2023 dollars) would pay just $2 ($18 in 2023 dollars) extra per week".^[1] The law took into effect for corporations on January 1, 1968, and for individuals on April 1, 1968, with the surcharge ending on July 1, 1969.^[2]

As a result of the tax, the federal government had a budget surplus in 1969, which would be its last until 1998.^[3] The tax has been the third largest one-year revenue increase adjusted for inflation and the largest as a percent of the GDP since 1968, which is quite impressive for a surcharge that people don't often even know about.^[4] The US economy showed slowdown starting in 1968. Quarterly, the GDP Growth gradually slowed from 8.4% in Q1 of 1968 to -1.9% in Q4 1969.^[5] Annually, the GDP Growth slowed from 4.8% in 1968 to 0.2% in 1970.^[6] The tax, however, visibly did nearly nothing to help in the Vietnam War as the US pulled out of the war in 1973 and South Vietnam officially lost in 1975.

The automobile excise tax was repealed in 1971 in the

.

Legislative history

Final House of Representatives vote, June 20, 1968^[7]

Vote by Party	Yea		Nay		Not Voting
Republicans	114	61%	73	39%	0
Democrats	153	66%	77	34%	14
Total	267	64%	150	36%	14

Final Senate vote, June 21, 1968^[8]

Vote by Party	Yea		Nay		Not Voting
Republicans	31	94%	2	6%	3
Democrats	33	70%	14	30%	16
Total	64	80%	16	20%	19

References