The tax strategy of the Labour governments of 1964–70 was intended to be both radical and reforming. That is, it had to fulfil the demands generated by the Labour movement as well as address issues of tax reform which were less closely tied to party politics. This article assesses Labour's ability to do this by paying particular attention to the contrasting budgets of 1965 and 1966. It examines the ideas of Nicholas Kaldor and the interests of the trade unions as two of the forces which shaped tax policy. While recognizing the difficulty of introducing new taxes, the article none the less sees much that was traditional in Labour's approach and offers a pessimistic view of the capacity of the party to change its outlook in the 1960s.