Lyndon Johnson on Tax Reform

Restore the inheritance tax

We currently live in a land of income and wealth inequality that vastly greater than what existed in the middle of the 20th century: "an equal starting point in the race of life," in Lyndon Johnson's famous image.

There is, moreover, a challenging paradox here. This country has intervened fundamentally in how inheritance is handled--as with the eradication of the law of primogeniture.

While we ought to restore the inheritance tax, we should not tackle the problem of inheritance at the point where the ambition to pass something on is inspiring parents to do the most they can for their children's education.

Raised income tax with 10% surcharge

Yet here was LBJ raising the top rate to an effective 77% via his 10% income tax surcharge. It was met with the boos that greeted much of everything that the president did in 1968, the year of the Tet Offensive in Vietnam, Martin Luther King's assassination, and the "Yippie protests" at the Democratic National Convention in Chicago. Leftists called the surcharge a war tax.

Johnson had quit the presidency in any event, announcing in March that he would not be running for reelection that year.

6% surcharge to restrain unbalanced economic expansion

• Wages were the highest in history-and the unemployment rate, announced yesterday, reached the lowest point in 13 years;
• Total after-tax income of American families rose nearly 5%
• Corporate profits after taxes rose a little more than 5%
• Our gross national product advanced 5.5%, to about $740 billion;
• Income per farm went up 6%.