title: Second Revenue Act of 1940
text: # Second Revenue Act of 1940
  
  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.
  
  Second Revenue Act of 1940 Normal Tax on Corporations
  
  53 Stat. 974 :
  
  | Net Income (dollars) | Rate (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.
  
  Second Revenue Act of 1940 Excess Profits Tax on Corporations
  
  53 Stat. 975 :
  
  | Adjusted Excess Profits Net Income (dollars) | Rate (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."
  