Revenue Act of 1918

The Revenue Act of 1918, 40 Stat. 1057, raised income tax rates once again. The bottom tax bracket was expanded but raised from 2% to 6%.

The act simplified the tax structure created by the 1917 act. Instead of applying a "like normal tax" and a "like additional tax" to the 1916 act normal tax and additional tax it created a single tax structure with a Normal Tax and a Surtax.

The top rate was increased to 77%, and applied to income above $1,000,000. The top rate of the War Revenue Act of 1917 had taxed all income above $2,000,000 at a 67% rate.

The act was applicable to incomes for 1918. For 1919 and 1920 the top normal tax rate was reduced from 12 percent to 8%. This reduced the top marginal tax rate that combined normal tax and surtax from 77% to 73%.

Even in 1918, only 5% of the population paid federal income taxes (up from 1% in 1913), and yet the income tax funded one-third of the cost of World War I.

Income Tax for Individuals

A Normal Tax and a Surtax were levied against the net income of individuals as shown in the following table.

Revenue Act of 1918 Income Tax on Individuals 40 Stat. 1062 ^[1]
Net Income (dollars)	Normal Rate for 1918 (percent)	Normal Rate for 1919, 1920 (percent)	Surtax Rate (percent)	Combined Rate for 1918 (percent)	Combined Rate for 1919, 1920 (percent)
0	6	4	0	6	4
4,000	12	8	0	12	8
5,000	12	8	1	13	9
6,000	12	8	2	14	10
8,000	12	8	3	15	11
10,000	12	8	4	16	12
12,000	12	8	5	17	13
14,000	12	8	6	18	14
16,000	12	8	7	19	15
18,000	12	8	8	20	16
20,000	12	8	9	21	17
22,000	12	8	10	22	18
24,000	12	8	11	23	19
26,000	12	8	12	24	20
28,000	12	8	13	25	21
30,000	12	8	14	26	22
32,000	12	8	15	27	23
34,000	12	8	16	28	24
36,000	12	8	17	29	25
38,000	12	8	18	30	26
40,000	12	8	19	31	27
42,000	12	8	20	32	28
44,000	12	8	21	33	29
46,000	12	8	22	34	30
48,000	12	8	23	35	31
50,000	12	8	24	36	32
52,000	12	8	25	37	33
54,000	12	8	26	38	34
56,000	12	8	27	39	35
58,000	12	8	28	40	36
60,000	12	8	29	41	37
62,000	12	8	30	42	38
64,000	12	8	31	43	39
66,000	12	8	32	44	40
68,000	12	8	33	45	41
70,000	12	8	34	46	42
72,000	12	8	35	47	43
74,000	12	8	36	48	44
76,000	12	8	37	49	45
78,000	12	8	38	50	46
80,000	12	8	39	51	47
82,000	12	8	40	52	48
84,000	12	8	41	53	49
86,000	12	8	42	54	50
88,000	12	8	43	55	51
90,000	12	8	44	56	52
92,000	12	8	45	57	53
94,000	12	8	46	58	54
96,000	12	8	47	59	55
98,000	12	8	48	60	56
100,000	12	8	52	64	60
150,000	12	8	56	68	64
200,000	12	8	60	72	68
300,000	12	8	63	75	71
500,000	12	8	64	76	72
1,000,000	12	8	65	77	73

Exemption of $1,000 for single filers and $2,000 for married couples and head of family; $200 exemption for each dependent under 18.

Inflation-adjusted numbers

Corrected for inflation by CPI:

1918 dollars	2005 dollars
$1,000,000	$12,933,775
$2,000,000	$25,867,550

Notes

↑ Facsimile from Statutes at Large

Tax Acts of the United States

Internal Revenue	1861 1862 1864 1913 1916 1917 1918 1921 1924 1926 1928 1932 1934 1935 1936 1940 1940 (2nd) 1941 1942 1943 1943 1944 1945 1948 1950 1950 1951 1954 1954 Code 1962 1964 1968 1969 1971 1975 1976 1977 1978 1981 1982 Gas Tax 1984 COBRA 1986 1986 Code 1990 1993 1996 1997 1998 2001 2002 2003 2004 2005 2006 2008 Crisis 2009 2010 2012

Tariffs	1789: Hamilton I 1790: Hamilton II 1792: Hamilton III 1816: Dallas 1824: Sectional 1828: "Abominations" 1832 1833: Compromise 1842: Black 1846: Walker 1857 1861: Morrill 1872 1875 1883: Mongrel 1890: McKinley 1894: Wilson–Gorman 1897: Dingley 1909: Payne–Aldrich 1913: Underwood 1921: Emergency 1922: Fordney–McCumber 1930: Smoot–Hawley 1934: Reciprocal 1948: GATT 1962 1974/75 1979 1984 1988 1988: Canada FT 1993: NAFTA 1994: WTO 2002: Steel

This article is issued from Wikipedia - version of the 10/22/2013. The text is available under the Creative Commons Attribution/Share Alike but additional terms may apply for the media files.