Revenue Act of 1936
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
- Revenue Act of 1935, which raised taxes on high incomes
Tax on corporations
Normal tax
A 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
A 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
A 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 |
24,000 | 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
- Revenue Act of 1935, which raised taxes on high incomes
References
Further reading
- Paul, Randolph E. "The Background of the Revenue Act of 1937." U. Chicago Law Review . 5 (1937): 41+ online