The Revenue Act of 1936, 49 Stat. 1648 (June 22, 1936), established an "undistributed profits tax" on corporations in the United States .
It was signed into law by President Franklin D. Roosevelt.
The act was applicable to incomes for 1936 and thereafter. Roosevelt sought additional permanent revenue of $620,000,000 and temporary revenue of $517,000,000. To secure the permanent revenue he suggested the substitution of a tax on undistributed earnings of corporations. Individual rates were raised only on the very rich (that is, income over $5 million a year.). [1]
See also
edit- Revenue Act of 1935, which raised taxes on high incomes
Tax on corporations
editNormal tax
editA Normal Tax was levied on the net income of corporations as shown in the following table.
Revenue Act of 1936 Tax on Corporations | |||
Net Income (dollars) |
Rate (percent) | ||
0 | 8 | ||
2,000 | 11 | ||
15,000 | 13 | ||
40,000 | 15 |
Surtax on undistributed profits
editA Surtax was levied on corporations on "undistributed profits", i.e. profits not paid out in dividends, as shown in the following table.
Revenue Act of 1936 Surtax on Undistributed Profits | |||
Application (percent of undistributed net income) |
Surtax Rate (percent) | ||
up to 10 | 7 | ||
from 10 to 20 | 12 | ||
from 20 to 40 | 17 | ||
from 40 to 60 | 22 | ||
over 60 | 27 |
Tax on individuals
editA normal tax and a surtax were levied against the net income of individuals as shown in the following table.
Revenue Act of 1936 Normal Tax and Surtax on Individuals | |||
Net Income (dollars) |
Normal Rate (percent) |
Surtax Rate (percent) |
Combined Rate (percent) |
0 | 4 | 0 | 4 |
4,000 | 4 | 4 | 8 |
6,000 | 4 | 5 | 9 |
8,000 | 4 | 6 | 10 |
10,000 | 4 | 7 | 11 |
12,000 | 4 | 8 | 12 |
14,000 | 4 | 9 | 13 |
16,000 | 4 | 11 | 15 |
18,000 | 4 | 13 | 17 |
20,000 | 4 | 15 | 19 |
22,000 | 4 | 17 | 21 |
26,000 | 4 | 19 | 23 |
32,000 | 4 | 21 | 25 |
38,000 | 4 | 24 | 28 |
44,000 | 4 | 27 | 31 |
50,000 | 4 | 31 | 35 |
56,000 | 4 | 35 | 39 |
58,000 | 4 | 35 | 39 |
62,000 | 4 | 39 | 43 |
68,000 | 4 | 43 | 47 |
74,000 | 4 | 47 | 51 |
80,000 | 4 | 51 | 55 |
90,000 | 4 | 55 | 59 |
100,000 | 4 | 58 | 62 |
150,000 | 4 | 60 | 64 |
200,000 | 4 | 62 | 66 |
250,000 | 4 | 64 | 68 |
300,000 | 4 | 66 | 70 |
400,000 | 4 | 68 | 72 |
500,000 | 4 | 70 | 74 |
750,000 | 4 | 72 | 76 |
1,000,000 | 4 | 73 | 77 |
2,000,000 | 4 | 74 | 78 |
5,000,000 | 4 | 75 | 79 |
- Exemption of $1,000 for single filers and $2,500 for married couples and heads of family. A $400 exemption for each dependent under 18.
See also
edit- Revenue Act of 1935, which raised taxes on high incomes
References
editFurther reading
edit- Paul, Randolph E. "The Background of the Revenue Act of 1937." U. Chicago Law Review . 5 (1937): 41+ online