The crisis of World War II led Congress to pass four excess profits statutes between 1940 and 1943. The 1940 rates ranged from 25 to 50 percent and the 1941 ones from 35 to 60 percent. In 1942 a flat rate of 90 percent was adopted, with a postwar refund of 10 percent; in 1943 the rate was increased to 95 percent, with a 10 percent refund. Congress gave corporations two alternative excess profits tax credit choices: either 95 percent of average earnings for 1936–1939 or an invested capital credit, initially 8 percent of capital but later graduated from 5 to 8 percent. In 1945 Congress repealed the tax, effective 1 January 1946. The Korean War induced Congress to reimpose an excess profits tax, effective from 1 July 1950 to 31 December 1953. The tax rate was 30 percent of excess profits with the top corporate tax rate rising from 45% to 47%, a 70 percent ceiling for the combined corporation and excess profits taxes.
In 1991 some members of Congress sought unsuccessfully to pass an excess profits tax of 40 percent upon the larger oil companies as part of energy policy. Some social reformers have championed a peacetime use of the excess profits tax, but such proposals face strong opposition from businesses and some economists, who argue that it would create a disincentive to capital investment.
Excess-Profits Tax Be Put on Defense Contractors during Wartime Is Long Overdue (Posted 2013-01-01 23:18:49)
Jan 01, 2013; No one can safely predict what will happen in 2013, but here are a few things I would like to see occur when it comes to national...
Excess-Profits Tax Be Put on Defense Contractors during Wartime Is Long Overdue (Posted 2013-01-03 22:28:14)
Jan 03, 2013; No one can safely predict what will happen in 2013, but here are a few things I would like to see occur when it comes to national...