The

United States The United States of America (U.S.A. or USA), commonly known as the United States (U.S. or US) or America, is a country primarily located in North America. It consists of 50 states, a federal district, five major unincorporated territorie ...

Revenue and Expenditure Control Act of 1968'' created a temporary 10 percent

income tax An income tax is a tax imposed on individuals or entities (taxpayers) in respect of the income or profits earned by them (commonly called taxable income). Income tax generally is computed as the product of a tax rate times the taxable income. Tax ...

surcharge on both individuals and

corporation A corporation is an organization—usually a group of people or a company—authorized by the state to act as a single entity (a legal entity recognized by private and public law "born out of statute"; a legal person in legal context) and r ...

s through June 30, 1969 to help pay for the

Vietnam War The Vietnam War (also known by #Names, other names) was a conflict in Vietnam, Laos, and Cambodia from 1 November 1955 to the fall of Saigon on 30 April 1975. It was the second of the Indochina Wars and was officially fought between North Vie ...

. It also delayed the scheduled reduction in the

telephone A telephone is a telecommunications device that permits two or more users to conduct a conversation when they are too far apart to be easily heard directly. A telephone converts sound, typically and most efficiently the human voice, into e ...

and

automobile A car or automobile is a motor vehicle with Wheel, wheels. Most definitions of ''cars'' say that they run primarily on roads, Car seat, seat one to eight people, have four wheels, and mainly transport private transport#Personal transport, pe ...

excise tax file:Lincoln Beer Stamp 1871.JPG, upright=1.2, 1871 U.S. Revenue stamp for 1/6 barrel of beer. Brewers would receive the stamp sheets, cut them into individual stamps, cancel them, and paste them over the Bunghole, bung of the beer barrel so when ...

, causing them to end in 1973 instead of 1969. It was signed into law by President Lyndon Johnson on June 28, 1968. Though overall creating a 10 percent surcharge, as Johnson stated just before signing the bill, "A family of four earning less than $5,000 ($ in dollars) would pay nothing additional. A family making $10,000 ($ in dollars) would pay just $2 ($ in dollars) extra per week". It took into effect for corporations on January 1, 1968, and for individuals on April 1, 1968, being effective until July 1, 1969. As a result of the tax, the Federal Government had a budget surplus in 1969 which would be the last until 1998. The tax has been the third largest 1-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. 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. Annually, the GDP Growth slowed from 4.8% in 1968 to 0.2% in 1970. The tax, however, visibly did nearly nothing to help in the

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 Revenue Act of 1971 and the

Federal telephone excise tax The federal telephone excise tax is a statutory federal excise tax imposed under the Internal Revenue Code in the United States under on amounts paid for certain "communications services". The tax was to be imposed on the person paying for the co ...

was continued until 2006. The act no longer has any legacy or stigma on the

as everything contained in the bill has no effect on the current US

Tax Law Tax law or revenue law is an area of legal study in which public or sanctioned authorities, such as federal, state and municipal governments (as in the case of the US) use a body of rules and procedures (laws) to assess and collect taxes in a ...

Legislative history

;Final House of Representatives vote, June 20, 1968 ;Final Senate vote, June 21, 1968

References

{{DEFAULTSORT:Revenue And Expenditure Control Act Of 1968 United States federal taxation legislation 1968 in law