SIGNIFICANT DEVELOPMENTS IN THE LAW OF FEDERAL TAXATION, 1941-1947: II

The 1941 Revenue Act carried forward the rather complex normal tax structure prescribed by the 1940 Revenue Act and in addition introduced a corporate surtax rate schedule. The normal tax rates were increased to absorb the 10% defense tax previously imposed as a separate tax and also a very slight increase in the rates applicable to corporations with a normal-tax net income of less than $38,461.54. As so altered the normal tax amounted to 24% in the case of corporations having normal-tax net income over $38,461.54, and in the case of corporations having no more than this amount of normal-tax net income the applicable rate was determined by use of a bracket system that ranged from 15% on the first $5,000 to 37% on the excess over $25,000. The new surtax imposed by the 1941 act was levied at the rate of 6% on the first $25,000 of surtax net income and 7% on the remainder.