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Revenue and Expenditure Control Act of 1968

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Revenue and Expenditure Control Act of 1968
Great Seal of the United States
Long titleAn Act to increase revenues, to limit expenditures and new obligational authority, and for other purposes.
Enacted bythe 90th United States Congress
EffectiveJune 28, 1968
Citations
Public law90-364
Statutes at Large82 Stat. 251
Codification
Titles amended26 U.S.C.: Internal Revenue Code
U.S.C. sections amendedI.R.C. ch. 1 §§ 101-110, 201-205, 301-303
Legislative history
  • Introduced in the House as H.R. 15414
  • Passed the Senate on April 2, 1968 (57-31)
  • Passed the House on June 20, 1968 (257-162)
  • Reported by the joint conference committee on June 20, 1968; agreed to by the House on June 20, 1968 (268-150) and by the Senate on June 21, 1968 (64-16)
  • Signed into law by President 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 income tax surcharge for both individuals and corporations through June 30, 1969, to help pay for the Vietnam War. It also delayed a scheduled reduction in the telephone and automobile excise tax, 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 was its last surplus until 1998.[3] The tax produced the third largest one-year revenue increase, adjusted for inflation, and the largest increase as a percent of GDP since 1968.[4] US GDP growth gradually slowed from 8.4% in Q1 of 1968 to -1.9% in Q4 1969.[5] Annually, GDP growth slowed from 4.8% in 1968 to 0.2% in 1970.[6]

The automobile excise tax was repealed in 1971 in the Revenue Act of 1971 and the Federal telephone excise tax was continued until 2006. The act has no direct continuing effect on United States Tax Law as all of its provisions have expired or been repealed.[citation needed]

Legislative history

[edit]
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

[edit]
  1. ^ "Historical Perspective: Sacrifice and Surcharge (Copyright, 2005, Tax Analysts)".
  2. ^ https://www.finance.senate.gov/imo/media/doc/PrtRevenue.pdf [bare URL PDF]
  3. ^ "Federal Surplus or Deficit [-]". 30 June 1901.
  4. ^ "Biggest Tax Increase in History?". factcheck.org. 10 July 2012.
  5. ^ "Real Gross Domestic Product". April 1947.
  6. ^ "GDP growth (Annual %) - United States | Data".
  7. ^ "TO ADOPT THE CONFERENCE REPORT ON H.R. 15414, THE REVENUE ... -- House Vote #357 -- Jun 20, 1968".
  8. ^ "TO AGREE TO CONFERENCE REPORT ON H.R. 15414, THE PROPOSED ... -- Senate Vote #468 -- Jun 21, 1968".
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