Timelines In Tax History: Guns, Butter, And The Vietnam War Tax Surcharge

The American economy was booming in the mid-1960s. Real GDP growth averaged more than 5% between 1961 and 1967, reaching as high as 6.5% in 1966. Millions of Americans enjoyed the fruits of this prosperity, including rising incomes and plentiful jobs.

Tax cuts got much of the credit for this growth — especially the one enacted in 1964. As the economist Arthur Okun observed: “The best known fact about the Revenue Act of 1964 is that, in the year and a half since it took effect, economic activity has expanded briskly.”