Tax Cut JFK

About Tax Cut JFK

President Kennedy proposed a major tax cut in 1963 to stimulate the economy. The Revenue Act of 1964, signed by President Johnson after Kennedys assassination, reduced the top individual rate from 91 percent to 70 percent and the corporate rate from 52 percent to 48 percent. The tax cut was Keynesian demand management, designed to close the output gap. Kennedy argued that the high rates discouraged investment. The tax cut was followed by strong economic growth and increased revenue. Conservative supply side economists later cited the Kennedy tax cut as evidence that rate cuts could increase revenue, though most economists attribute the revenue increase to economic growth and the broadening of the tax base rather than the Laffer Curve effect.