Public Papers of Lyndon B. Johnson, 1963-1964

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Author: Lyndon B. Johnson  | Date: October 27, 1964

724
Presidential Statement No. 5 on Economic Issues: Further Tax Reduction.
October 27, 1964

1. TO SUSTAIN the prosperity of the economy, this administration has enacted the most far-reaching tax reductions in our history. We have already cut both individual and corporate income tax liabilities by nearly one-fifth. We have pledged excise tax cuts in 1965, and we anticipate further income tax cuts in the years ahead as part of our program for a prospering, peacetime economy.

2. In 1962, important measures were taken to help industry modernize its facilities.

—The revision of the depreciation guidelines added $1 ½ billion a year to corporate cash flow.

—The investment credit lowered business tax liabilities by more than $1 billion a year.

3. The Revenue Act of 1964 cut personal and corporate income tax rates, raising private after-tax incomes directly by $11 1/2 billion. This reduction has given a great boost to the economy, as our advances in the past year—3d quarter 1964 over 3d quarter 1963—plainly show (annual rates):

—The gross national product is up $40 billion, or 4.6 percent in stable dollars.

—Corporate profits are up 22 percent (preliminary estimates).

—Business investment in plant and equipment is up 11.4 percent.

—Consumer income, after taxes, is up $32 billion—and consumer buying is up $27 billion, the greatest such increase in our peacetime history.

4. The size and timing of further tax reduction must Be tailored most carefully to fit

—the developing budget program as a whole;

—changing business conditions, so that tax cuts serve to sustain prosperity without inflationary excesses.

5. Currently, the Treasury Department is intensively studying each of the 75 excise taxes to design a rational program of excise tax removal and reduction. Later, we will again focus on income taxation-both personal and corporate—as the major areas for anticipated future tax cuts.

NOTE: For a statement by the President announcing a series of statements on economic issues, see Item 707.

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Chicago: Lyndon B. Johnson, "724 Presidential Statement No. 5 on Economic Issues: Further Tax Reduction.," Public Papers of Lyndon B. Johnson, 1963-1964 in Federal Register Division. National Archives and Records Service, Public Papers of the Presidents of the United States, Lyndon B. Johnson, 1963-1964 (Washington, D.C.: Government Printing Office, 1956-), Pp.1673-1674 Original Sources, accessed September 19, 2018, http://www.originalsources.com/Document.aspx?DocID=CNCWZ3U2L3M7LKZ.

MLA: Johnson, Lyndon B. "724 Presidential Statement No. 5 on Economic Issues: Further Tax Reduction." Public Papers of Lyndon B. Johnson, 1963-1964, in Federal Register Division. National Archives and Records Service, Public Papers of the Presidents of the United States, Lyndon B. Johnson, 1963-1964 (Washington, D.C.: Government Printing Office, 1956-), Pp.1673-1674, Original Sources. 19 Sep. 2018. www.originalsources.com/Document.aspx?DocID=CNCWZ3U2L3M7LKZ.

Harvard: Johnson, LB, '724 Presidential Statement No. 5 on Economic Issues: Further Tax Reduction.' in Public Papers of Lyndon B. Johnson, 1963-1964. cited in , Federal Register Division. National Archives and Records Service, Public Papers of the Presidents of the United States, Lyndon B. Johnson, 1963-1964 (Washington, D.C.: Government Printing Office, 1956-), Pp.1673-1674. Original Sources, retrieved 19 September 2018, from http://www.originalsources.com/Document.aspx?DocID=CNCWZ3U2L3M7LKZ.