Revenue Act of 1940

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The Revenue Act of 1940 temporarily and permanently increased individual income tax rates, temporarily and permanently increased corporate tax rates (top rate rose from 19% to 33%), and temporarily increased most excise tax rates to 30-50%.

The personal exemption fell from $2,500 to $2,000 (married couples).

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 1940
Tax on Corporations

53 Stat. 863 [1]

Net Income
(dollars)
Rate
(percent)
0 19
25,000 33

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 1940
Normal Tax and Surtax on Individuals

53 Stat. 5 [2]

Net Income
(dollars)
Normal Rate
(percent)
Surtax Rate
(percent)
Combined Rate
(percent)
0 4 0 4
4,000 4 4 8
6,000 4 6 10
8,000 4 8 12
10,000 4 10 14
12,000 4 12 16
14,000 4 15 19
16,000 4 18 22
18,000 4 21 25
20,000 4 24 28
22,000 4 27 31
26,000 4 30 34
32,000 4 33 37
38,000 4 36 40
44,000 4 40 44
50,000 4 44 48
60,000 4 47 51
70,000 4 50 54
80,000 4 53 57
90,000 4 56 60
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 $800 for single filers and $2,000 for married couples and heads of family. A $400 exemption for each dependent under 18.

References

  1. ^ Facsimile
  2. ^ Facsimile
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