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Tax Legislation
 

Major Enacted Tax Legislation, 1940-1949

 

Revenue Act of 1948

  • Individual Income Tax Rates. Reduced individual income tax rates 5-13%.
  • Personal Exemption. Increased personal exemption amount from $500 to $600.
  • Joint Filers. Permitted married couples to split their incomes for tax purposes.
  • Additional Exemption. Provided additional exemption for taxpayers age 65 and over.


Revenue Act of 1945

  • Excess Profits Tax. Repealed excess profits tax.
  • Individual Income Tax Rates. Reduced individual income tax rates 3 percentage points and 5% (top rate fell from 94% to 86.45%).
  • Corporate Tax Rates. Reduced corporate tax rates (top rate dropped from 40% to 38%).


Individual Income Tax Act of 1944

  • Individual Income Tax. Raised individual income taxes.
  • Victory Tax. Repealed 3% Victory tax.
  • Personal Exemptions. Standardized value of personal exemptions at $500 per person.


Current Tax Payment Act of 1943

  • Withholdings. Imposed withholding of income tax by employers on wages paid.
  • Income Tax Liability. Canceled 75-100% of lower of 1942 or 1943 individual income tax liability.


Revenue Act of 1943

  • Excise Taxes. Increased excise taxes on alcohol, jewelry, telephones, admissions, etc.
  • Excess Profits Tax. Increased excess profits tax rate from 90% to 95%.
  • Victory Tax. Lowered Victory tax rate from 5% to 3% and repealed postwar credit.


Revenue Act of 1942

  • Individual Income Tax. Increased individual income tax rates.
  • Corporate Tax. Increased corporate tax rates (top rate increased from 31% to 40%).
  • Excess Profits Tax. Replaced 35-60% graduated rate schedule for excess profits tax with flat 90% rate.
  • Victory Tax. Created 5% Victory tax on all individual income over $624, with postwar credit.
  • Personal Exemption. Reduced personal exemption amount from $1,500 to $1,200 (married couples).
  • Exemption for Dependents. Reduced exemption amount for each dependent from $400 to $350.


Revenue Act of 1941

  • Excess Profits Tax. Increased excess profits tax by 10 percentage points (top rate increased from 50% to 60%).
  • Tax Increases. Permanently extended 1940 temporary individual, corporate, and excise tax increases.
  • Corporate Tax. Increased corporate tax rates 6-7 percentage points (top rate increased from 24% to 31%).
  • Excise Taxes. Increased excise taxes on alcohol, tires, etc.
  • Personal Exemption. Reduced personal exemption amount from $2,000 to $1,500 (married couples).


Revenue Act of 1940

  • Individual Income Tax. Temporarily and permanently increased individual income tax rates.
  • Corporate Tax. Temporarily and permanently increased corporate income tax rates (top rate from 19% to 22.1%).
  • Excise Taxes. Temporarily increased most excise tax rates to 30-50%.
  • Personal Exemption. Reduced personal exemption amount from $2,500 to $2,000 (married couples).


Second Revenue Act of 1940

  • Excess Profits Tak. Created corporate excess profits tax (top rate of 50%).
  • Corporate Tax. Increased corporate income tax rates (top rate increased from 22.1% to 24%).