The United States Second Revenue Act of 1940 created a corporate excess profits tax (top rate 50%) and increased corporate tax rates (top rate from 33% to 35%).
Tax on corporations
Normal tax
A Normal Tax was levied on the net income of corporations as shown in the following table.
{| class="wikitable" style="text-align:center;"
|-
|colspan="4"| Second Revenue Act of 1940<br />Normal Tax on Corporations<br />
|-
| Net Income<br />(dollars)
| Rate<br />(percent)
|-
| 0 || 22.1
|-
| 25,000 || 35
|}
Excess Profits Tax
A Excess Profits Tax was levied on the excess profits net income (i.e., net income less allowances and exemptions) of corporations as shown in the following table.
{| class="wikitable" style="text-align:center;"
|-
|colspan="4"| Second Revenue Act of 1940<br />Excess Profits Tax on Corporations<br />
|-
| Adjusted<br>Excess Profits<br>Net Income<br />(dollars)
| Rate<br />(percent)
|-
| 0 || 25
|-
| 25,000 || 33
|-
| 50,000 || 35
|-
| 100,000 || 40
|-
| 250,000 || 45
|-
| 500,000 || 50
|}
- An exemption of $5,000 is allowed, and also an "excess profits credit" and "unused excess profits credit."