The United States Revenue Act of 1916, (ch. 463, 39 Stat. 756, September 8, 1916) raised the lowest income tax rate from 1% to 2% and raised the top rate to 15% on taxpayers with incomes above $2 million ($56 million in 2023 dollars). Previously, the top rate had been 7% on income above $500,000 ($14 million in 2023 dollars). The Act also instituted the federal estate tax.[1]
The entry of the United States into World War I greatly increased the need for revenue.
An excess profits tax was introduced and the modern estate tax was imposed.
The act was applicable to incomes for 1916.
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Transcription
Income Tax Table for Individuals
A Normal Tax and an Additional Tax were levied against the net income of individuals as shown in the following table.
| Revenue Act of 1916 Normal Tax and Additional Tax on Individuals | |||
| Net Income (dollars) |
Normal Rate (percent) |
Additional Rate (percent) |
Combined Rate (percent) |
| 0 | 2 | 0 | 2 |
| 20,000 | 2 | 1 | 3 |
| 40,000 | 2 | 2 | 4 |
| 60,000 | 2 | 3 | 5 |
| 80,000 | 2 | 4 | 6 |
| 100,000 | 2 | 5 | 7 |
| 150,000 | 2 | 6 | 8 |
| 200,000 | 2 | 7 | 9 |
| 250,000 | 2 | 8 | 10 |
| 300,000 | 2 | 9 | 11 |
| 500,000 | 2 | 10 | 12 |
| 1,000,000 | 2 | 11 | 13 |
| 1,500,000 | 2 | 12 | 14 |
| 2,000,000 | 2 | 13 | 15 |
- Exemption of $3,000 for single filers and $4,000 for married couples.
Notes
- ^ Revenue Act of 1916, section 201, Ch. 463, 39 Stat. 756, 777 (Sept. 8, 1916).
- ^ Facsimile from Statutes at Large
External links
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This page was last edited on 13 February 2024, at 12:06