5 Presidents Guilty of Raising Taxes the Most (And 5 Who Actually Lowered Them)

As in every presidential election year, Americans are spending 2024 reviewing tax proposals from presidential candidates to see how changes could affect their personal budgets. Paying fewer taxes may also reduce your financial stress.

One way to compare this year’s proposals is to see how past presidents fared when it came to presidential tax successes and failures.

Do you think you know which presidents raised and lowered taxes the most during their years in the White House? You may be surprised to learn which presidents were the best and worst tax policymakers.

Abraham Lincoln needed to raise money for the Civil War and turned to a federal tax to help get the funds for the war.

The president’s plan placed taxes on incomes from $600 to $10,000 at 3% tax and on an income higher than $10,000 it was 5%. Congress later repealed the tax in 1871.

Lincoln’s Revenue Act also required the creation of the Internal Revenue Service to collect taxes with the government opening offices in 1862.

In the first year of Woodrow Wilson’s term, the United States enacted the 16th Amendment, allowing Congress to collect taxes from American residents.

Wilson’s administration began collecting taxes that same year, marking the first time in the 20th century that the federal government collected taxes.

Around 3% of the country’s population was affected by the change with individuals paying 1% in taxes on income over $3,000.

Herbert Hoover is known as the president who was in charge during the Great Depression, which was one of the worst economic times in the country’s history.

Hoover signed the Revenue Act of 1932 into law, taxing individual income as well as increasing estate and corporate taxes. It also created a gift tax.

The tax was seen as a good way to increase revenue during the Depression, but its downside was discouraging spending on goods.

President Franklin Roosevelt needed tax increases for a few reasons during his long tenure as president.

Roosevelt had to fund his public works projects to help pull the United States out of the Great Depression. Later he raised the top marginal tax rate to 94%, the highest rate ever, to help fund World War II.

His tax plans also helped to fund the initial stages of Social Security when it was established in 1935.

Harry Truman signed one of the biggest tax increases into law using the Revenue Act of 1950.

The legislation raised the top tax rate to 91% from only 20% as part of his plan to raise revenue to pay for the Korean War.

Warren Harding was only president for two years, dying in office, but he made some big changes to the tax code during his short tenure.

To pay for World War I, the top tax rate had been raised to 73%, and Harding had to contend with that. But after the war, Harding’s moves cut the top tax rate down to 50% with additional cuts made after he died by his successor, Calvin Coolidge.

President Dwight Eisenhower fought to keep the highest tax rate at 90% throughout the 1950s to cover the costs of military spending during the Korean War.

But when John Kennedy took over, he pushed for tax cuts and eventually reduced the top tax rate to 70% for Americans.

Ronald Reagan put forward two major tax cuts during his presidency to give breaks to Americans.

The Economic Recovery Tax Act in 1981 lowered the top tax rate to 50% from 70% and the Tax Reform Act of 1986 reduced it again to 28%.

But the tax cuts may have been too deep and created a large federal deficit. It led his successor, President George H.W. Bush, to break a campaign promise of “no new taxes” and raise taxes to reduce that deficit.

Bill Clinton signed tax cuts into law as part of his economic plan in the 1990s.

Clinton’s Taxpayer Relief Act of 1997 not only cut taxes, especially for the middle and lower class, but also created or changed 800 tax provisions. The act included the creation of Roth IRA accounts, education savings accounts, and a child tax credit.

Unlike his father, George W. Bush instituted tax cuts that favored high earners and corporations.

His plan cut the taxes for the top 1% of high earners in a way that allowed them to save around $50,000 a year. His administration also phased out the estate tax

Most Americans contend with taxes every year, which is why they could be paying particular attention to presidential elections.

Taxes can affect everything from your current income to your retirement plan. And managing how much you pay in taxes can help you build wealth. To minimize your taxes, make sure you’re saving enough for retirement in tax-advantaged plans such as a 401(k) or IRA, or after-tax vehicles like a Roth IRA if you qualify.