Walter Heller’s claim to fame stems from his years as chairman of the Council of Economic Advisers (CEA) from 1961 to 1964, under presidents John F. Kennedy and Lyndon B. Johnson. Before that, and after, he was an economics professor at the University of Minnesota.

As chairman of the CEA, Heller persuaded President Kennedy to cut marginal tax rates. This cut in tax rates, which was passed after Kennedy’s death, helped cause a boom in the U.S. economy. Heller’s CEA also developed the first “voluntary” (i.e., enforced by veiled threats rather than by explicit laws) wage-price guidelines.

Heller’s early academic work was on state and local taxation. In 1947 and 1948 he was tax adviser to the U.S. military government in Germany. He was involved in the currency and tax reforms that helped spur the German economic boom (see german economic miracle). In a 1950 article, Heller noted that the reduction in marginal tax rates helped “remove the repressive effect of extremely high rates.”

According to tax economist Joseph Pechman, Heller was also one of the first economists to recognize that tax deductions and tax preferences narrow the income tax base, thus requiring, for a given amount of revenue, higher marginal tax rates.

About the Author

David R. Henderson is the editor of The Concise Encyclopedia of Economics. He is also an emeritus professor of economics with the Naval Postgraduate School and a research fellow with the Hoover Institution at Stanford University. He earned his Ph.D. in economics at UCLA.

Selected Works

1949. “Tax and Monetary Reform in Occupied Germany.” National Tax Journal 2, no. 3: 215–231.
1966. New Dimensions of Political Economy. Cambridge: Harvard University Press.
1969 (with Milton Friedman). Monetary vs. Fiscal Policy. New York: W. W. Norton.
1975. “What’s Right with Economics?” American Economic Review 65, no. 1: 1–26.

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