Corporate Tax

Historic corporate tax charges and parentheses, 1909-2020

2018-2020 All taxable income 21 For tax years beginning after 2017, the Tax Cuts and Jobs Act (PL 115-97) replaces the tiered corporate tax structure with a flat corporate tax rate of 21%. 1993-2017 First $ 50,000 fifteen The Revenue Reconciliation Act of 1993 established the maximum corporate tax rate for businesses with
taxable income over $ 10 million.
Companies with taxable income over $ 15
Millions are subject to an additional tax of
3% of the excess of over $ 15 million or
$ 100,000, whichever is smaller $ 50,000-75,000 25th $ 75,000- $ 100,000 34 $ 100,000 to $ 335,000 39 $ 335,000- $ 10,000,000 34 $ 10,000,000- $ 15,000,000 35 15,000,000- $ 18,333,333 38 About $ 18,333,333 35 1988-1992 First $ 50,000 fifteen $ 50,000-75,000 25th $ 75,000- $ 100,000 34 $ 100,000 to $ 335,000 39 Over $ 335,000 34 1987 The first $ 25,000 fifteen The Tax Reform Act of 1986 (TRA86) introduced a new tariff structure with effect for the tax year 1988 and made the tariffs for the transition year 1987 an average of the tariffs before the TRA for 1986 and the tariffs after the TRA for 1988. $ 25,000 to $ 50,000 16.5 A new “alternative minimum tax” (AMT) replaced the additional minimum tax that came into effect in 1987. It required calculating an alternative measure of taxable income that would reduce or eliminate many tax privileges. The tax was 20 percent of the excess of that “Alternative Taxable Minimum Income” (AMTI) over $ 40,000. The $ 40,000 exemption was reduced by 25 percent of the AMTI’s surplus of over $ 150,000. AMT that exceeds regular tax could be offset against regular tax in future years. In 1998, “small” businesses (generally those with average gross revenues less than $ 5 million) were exempted from the AMT. $ 50,000-75,000 27.5 $ 75,000- $ 100,000 37 The maximum tax rate on capital gains was capped at 34 percent for 1987, which TRA86 said would be the rate for the highest corporate income tax bracket in 1988 and later. The maximum capital gains ratio was raised to 35 percent when the highest corporate tax bracket was raised in 1993. $ 100,000 to $ 335,000 42.5 $ 335,000- $ 1,000,000 40 $ 1,000,000 to $ 1,405,000 42.5 About $ 1,405,000 40 1984-1986 The first $ 25,000 fifteen $ 25,000 to $ 50,000 18th $ 50,000-75,000 30th The maximum tax rate for long-term capital gains was 28 percent. $ 75,000- $ 100,000 40 $ 100,000 to $ 1,000,000 46 $ 1,000,000 to $ 1,405,000 51 About $ 1,405,000 46 1983 The first $ 25,000 fifteen Since 1983, all taxable income from commercial operations (“Personal Service Corporations”) has been taxed at the corporate income tax rate of the highest income class. $ 25,000 to $ 50,000 18th $ 50,000-75,000 30th The maximum tax rate for long-term capital gains was 28 percent. $ 75,000- $ 100,000 40 Over $ 100,000 46 1982 The first $ 25,000 16 $ 25,000 to $ 50,000 19th $ 50,000-75,000 30th The maximum tax rate for long-term capital gains was 28 percent. $ 75,000- $ 100,000 40 Over $ 100,000 46 1979-1981 The first $ 25,000 17th $ 25,000 to $ 50,000 20th $ 50,000-75,000 30th The maximum tax rate for long-term capital gains was 28 percent. $ 75,000- $ 100,000 40 Over $ 100,000 46 1975-1978 The first $ 25,000 20th $ 25,000 to $ 50,000 22nd Over $ 50,000 48 The holding period for long-term capital gains treatment of assets was increased from 6 months to 9 months in 1977 and to 12 months in 1978. The rate remained at 30 percent. 1971-1974 The first $ 25,000 22nd Over $ 25,000 48 The maximum tax rate for long-term capital gains has been increased to 30 percent. 1970 The first $ 25,000 22.55 Includes a 2.5 percent surcharge for the Vietnam War. Over $ 25,000 49.2 The maximum tax rate for long-term capital gains has been increased to 28 percent. 1968-1969 The first $ 25,000 24.2 From 1969 to 1986, corporations were also subject to a “minimum surcharge tax” above a certain amount on certain “tax relief items” (e.g. percentage exhaustion, accelerated depreciation). For the 1969 through 1976 tax years, the tax was 10 percent of the tax preference over $ 30,000; after 1976 the tax was 15 percent of preferences, which exceeded the higher of $ 10,000 or regular income tax. Over $ 25,000 52.8 The prices include the Vietnam War surcharge of 10 percent. 1965-1967 The first $ 25,000 22nd Over $ 25,000 48 1964 The first $ 25,000 22nd Over $ 25,000 50 1952-1963 The first $ 25,000 30th From April 1, 1954 through the 1969 calendar year, the maximum tax rate on capital gains was 25 percent. Over $ 25,000 52 1951 The first $ 25,000 28.75 These rates reflect a tax increase (for the Korean War) effective March 31, 1951. The maximum capital gains tax rate has also been increased to 26 percent. Over $ 25,000 50.75 1950 The first $ 25,000 23 A surplus tax was also in force from July 1950 to the calendar year 1953. The tax was 30 percent of an adjusted profit figure reduced by credits for pre-war profits. It was not offset against income tax, but the sum of income and profit taxes was capped at a certain percentage of income (from 62 to 70 percent). Over $ 25,000 42 From the tax year 1942, profits from the sale of assets that were held for more than 6 months (long-term capital gains) could be treated separately from other taxable income and taxed at a maximum rate of 25 percent. 1946-1949 Taxable Income $ 50,000 or less: These rates are the sum of the “normal” tax rates and the “additional tax” rates that actually applied to slightly different definitions of taxable income. First $ 5,000 21 Next $ 15,000 23 Next $ 5,000 25th Next $ 25,000 53 From the tax year 1942, profits from the sale of assets that were held for more than 6 months (long-term capital gains) could be treated separately from other taxable income and taxed at a maximum rate of 25 percent. Taxable income over $ 50,000 38 1942-1945 Taxable Income $ 50,000 or less: These rates are the sum of the “normal” tax rates and the “additional tax” rates that actually applied to slightly different definitions of taxable income. First $ 5,000 25th Next $ 15,000 27 From the tax year 1942, profits from the sale of assets that were held for more than 6 months (long-term capital gains) could be treated separately from other taxable income and taxed at a maximum rate of 25 percent. Next $ 5,000 29 Next $ 25,000 53 Taxable income over $ 50,000 40 1941 Taxable Income $ 38,461.54 or less: These rates are the sum of the “normal” tax rates and the “additional tax” rates that actually applied to slightly different definitions of taxable income. First $ 5,000 21 Next $ 15,000 23 Next $ 5,000 25th Next $ 13,461.54 44 Taxable income over $ 38,461.54 31 1940 Taxable Income $ 31,964.30 or less: In addition, a profit tax was levied from June 1940 to the end of 1945, which exceeded the average pre-war profit. It was taken into account either as a deduction or as a credit for income tax and other surplus tax. First $ 5,000 14.85 The 1940 rates include additional “defense tax” rates which will be incorporated into the regular rates in later years. Next $ 15,000 16.5 Next $ 5,000 18.7 Next $ 6,964.30 38.3 Taxable Income Over $ 31,964.30, Not Over $ 38,565.84: First $ 5,000 15.4 Next $ 15,000 16.9 Next $ 5,000 18.9 Next $ 13,565.84 36.9 Taxable income over $ 38,565.84 24 1938-1939 Taxable Income $ 25,000 or Less: First $ 5,000 12.5 Next $ 15,000 14th Next $ 5,000 16 Taxable income over $ 25,000 19th 1936-1937 The first $ 2,000 8th An additional surcharge of 7 to 27 percent was levied on undistributed profits. Over $ 2,000, not over $ 15,000 11 Over $ 15,000, not over $ 40,000 13th Over $ 40,000 fifteen 1932-1935 All taxable income 13.75 From 1933 to 1945 there was an additional “valued” surplus income tax that was based on profits that exceeded a percentage of the value of the company’s shares. It was a deduction for income tax purposes. 1930-1931 First $ 3,000 0 Over $ 3,000 12th 1929 First $ 3,000 0 Over $ 3,000 11 1928 First $ 3,000 0 Over $ 3,000 12th 1926-1927 The first $ 2,000 0 Over $ 2,000 13.5 1925 The first $ 2,000 0 Over $ 2,000 13th 1922-1924 The first $ 2,000 0 Over $ 2,000 12.5 1919-1921 The first $ 2,000 0 Over $ 2,000 10 1918 The first $ 2,000 0 Over $ 2,000 12th 1917 All taxable income 6th From 1917 to 1922 there was an additional tax on “excess profits” and / or “war profits”. It has been approved as a deduction for calculating income tax. 1916 All taxable income 2 1913 (March 1) -1915 All taxable income 1 1909-1913 (February 28) First $ 5,000 0 Over $ 5,000 1

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