TheUnited StatesRevenue Act of 1916, (ch. 463, 39 Stat. 756, September 8, 1916) raised the lowestincome tax rate from 1% to 2% and raised the top rate to 15% on taxpayers with incomes above $2 million ($57.8 million in 2024 dollars). Previously, the top rate had been 7% on income above $500,000 ($14.4 million in 2024 dollars). The Act also instituted the federalestate tax.[1]
The entry of the United States intoWorld War I greatly increased the need for revenue.
Anexcess profits tax was introduced and the modernestate tax was imposed.
The act was applicable to incomes for 1916.
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 |
 | This United States federal legislation article is astub. You can help Wikipedia byexpanding it. |