Presidents and Tax Policy
The Politics of Persuasion
Over time Presidents have undertaken a variety of different approaches toward tax policy in an effort to respond to the large and often unpredictable U.S. economy. Once the Presidents decided which policy to pursue, they then had to try to rally public support. Their various speeches and campaigns to inform the public about tax policy met with varying success.
Through this exhibit, the Miller Center looks at various snapshots of presidential tax policy drawing on a wide array of its resources, including presidential speeches, forums, presidential recordings, and oral histories.
John F. Kennedy and the First Presidential Visit to the IRS
On May 1, 1961, President John F. Kennedy became the first President ever to visit the Internal Revenue Service. He made his historic visit in an effort to draw attention to the Special Message on Taxation that he had delivered to Congress just days earlier. Kennedy’s message stressed the importance of taxation to American society and pledged to simplify the tax code.
When President Kennedy followed up his Special Message with a trip to the IRS, he was introduced by IRS Commissioner Mortimer Caplin. This video begins with an excerpt from Kennedy’s Special Message and continues with footage of the President’s visit to the IRS, including an introduction by Caplin and Kennedy’s remarks to IRS employees.
Click to read Kennedy’s “Special Message to the Congress on Taxation” in its entirety.
The Miller Center has been fortunate to have former Commissioner of the Internal Revenue, Mortimer Caplin, as part of its community. He has spoken at the Miller Center a number of times providing his perspective and insight into presidential tax policy and the IRS.
Congress Restructures/Reforms the IRS
In 1998, Mortimer Caplin discussed President Kennedy’s visit to the IRS.
Below are two more of Caplin’s Forums:
The Presidency and the Internal Revenue Service, April 7, 1983Flash Audio (click to play):
Myths and Realities About the Internal Revenue Service, June 5, 1997Flash Audio (click to play):
Lyndon B. Johnson
Lyndon B. Johnson, State of the Union, January 8, 1964
In his first State of the Union, President Johnson outlined the goals of his administration, focusing on alleviating domestic problems such as poverty, high taxes, an unbalanced budget, and racial discrimination. He discussed the necessity of passing tax cuts, proclaiming, "We need a tax cut now to keep this country moving." Shortly thereafter, President Johnson signed the Revenue Act of 1964, which reduced both income and corporate tax rates.
Lyndon B. Johnson’s Telephone Conversation with Wilbur Mills
On February 26, 1964, President Johnson called Wilbur Mills, chairman of the House Ways and Means Committee, to thank him for his help in passing the Revenue Act of 1964 in Congress. Johnson mentioned the speech he planned to make on the passage of this tax legislation. He also discussed the contributions of the Democratic Chairman of the Senate Finance Committee, Harry Byrd, and Democratic Senate Finance Committee member, Russell Long.
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Lyndon B. Johnson, State of the Union, January 12, 1966
In this State of the Union, Johnson spoke about the success of reducing the national debt and his desired reforms to the tax code. The President also emphasized measures to avoid inflation, foreshadowing the economic crisis of the 1970s.
Gerald Ford, "Whip Inflation Now" Speech, October 8, 1974
President Ford addressed Congress on his proposal to improve the foundering economy, which included a tax increase at the center of that proposal. In a time of unprecedented high inflation and high unemployment, Ford unveiled his ill-fated "Whip Inflation Now" (WIN) plan to tackle inflation with a tax increase. Months later, after a lukewarm response to WIN, the President shifted his focus to the high unemployment rate and, with the support of Congress, passed a program that cut taxes.
Lou Cannon, The Nixon-Ford Presidency, March 3, 1986
Washington Post columnist Lou Cannon described the response to the "Whip Inflation Now" plan from within the Ford White House.Flash Audio (click to play):
Click to hear the full Forum.
Ronald Reagan’s Tax Cuts...and Increases
Ronald Reagan, Address to the Nation on Federal Tax Reduction Legislation, July 27, 1981
In this address, President Reagan spoke about cutting taxes and government spending as part of his economic recovery program, targeting the national debt.
Ronald Reagan, Address to the Nation on Federal Tax and Budget Reconciliation Legislation, August 16, 1982
President Reagan spoke about the Tax Equity and Fiscal Responsibility Act of 1982 or TEFRA and discounted claims that this was "the largest single tax increase in history," stressing that one-third of the increased tax revenue would come from those evading taxes. TEFRA represented a departure from the 1981 tax cuts, although Reagan noted it resulted from a difficult compromise.
Kenneth Khachigian, Oral History Interview, June 20-21, 2002
President Reagan’s chief speechwriter, Kenneth Khachigian, described the debate over TEFRA. He noted that Reagan believed that the tax increase would coincide with budget cuts and was dismayed when the budget increased instead.Flash Audio (click to play):
Lyn Nofziger, Oral History Interview, March 6, 2003
Lyn Nofziger, President Reagan’s acting press secretary and senior consultant on the 1984 re-election campaign, described his strong opposition to TEFRA. He then explained his role in getting the tax increase passed, despite initial objections from many Republicans in Congress.Flash Audio (click to play):
Click to read the full oral history transcript.
Ronald Reagan, Remarks on Signing the Tax Reform Act of 1986, October 22, 1986
In his remarks, President Reagan promised sweeping tax reform and tax relief for the poor, working families, and businesses alike. The Tax Reform Act of 1986 was intended to stimulate economic growth, job creation, and provide tax cuts, signaling a departure from the TEFRA tax increases and a return to Reagan-endorsed economic policies.
George H. W. Bush’s Reversal on Raising Taxes
George H. W. Bush, Acceptance Speech at RNC, August 18, 1988
As he accepted the Republican Party’s nomination for President, George H. W. Bush famously declared "Read my lips: no new taxes." He was unable to keep that campaign promise and paid the highest political price, losing reelection in 1992.
George H. W. Bush, Address to the Nation on the Budget, October 2, 1990
Faced with a sizeable national debt and a Democrat-controlled Congress, George H.W. Bush endured contentious budget negotiations in 1990. In this address, the President explained the Omnibus Budget Reconciliation Act of 1990, a deficit reduction agreement that included reduced government spending and tax increases. Many conservative Republicans felt betrayed when Bush agreed to raise taxes.Flash Audio (click to play):
Click to read the transcript.
Bill Clinton’s Tax Reform toward a Balanced Budget
Bill Clinton, Address Before a Joint Session of Congress, February 17, 1993
President Bill Clinton introduced his plans for the Omnibus Budget Reconciliation Act of 1993, including eliminating wasteful government spending, raising taxes, and creating jobs. The measures in this economic plan led to a balanced budget in 2000, the first since 1969.
George W. Bush’s Tax Cuts
George W. Bush, Remarks on Signing the Economic Growth and Tax Relief Reconciliation Act, June 7, 2001
President George W. Bush spoke about his historic "across the board" tax cuts. Combined with a sharp increase in defense spending after 9/11, the Bush tax cuts fomented significant growth of the national debt. Click to read the full transcript.
Does the New Economy Need a Tax Cut?
Robert Samuelson provides an journalist’s perspective on the Bush tax cuts in this forum from March 5, 2001.
George W. Bush, State of the Union Address, January 28, 2008
In his final State of the Union address, President Bush urged Congress not to allow his tax cuts expire.