Final answer:
The tax reduction enacted in February 1964 resulted in lower tax withholding rates for households and corporations, leading to an estimated $6.7 billion tax reduction for households and $1.7 billion reduction for corporations in 1964. Economists expected the overall reduction to be about $11 billion by 1965, which was approximately 1.5 percent of the nominal GDP in 1965.
Step-by-step explanation:
The tax reduction that Congress passed into law in February 1964, commonly known as the Kennedy Tax Cut, had significant results. For individual households, the tax withholding rates decreased from 18 percent to 14 percent, leading to an estimated tax reduction of about $6.7 billion. Taxes on corporations were also decreased, with a reduction of about $1.7 billion for 1964. Economists expected that the overall tax reduction would be about $11 billion by 1965, which was about 1.5 percent of the nominal GDP in 1965.