TheUnited StatesRevenue Act of 1926, 44 Stat. 9, reducedinheritance and personalincometaxes, cancelled manyexcise imposts, eliminated the gift tax and ended public access tofederal income tax returns.
The most notable parts of the Act were that maximum tax rates on inheritances and large estates were halved, as were income taxes for the wealthiest. As a consequence, taxes on the wealthy were greatly reduced.[1] To garner political support for such massive tax cuts for the wealthy, the Act also provided small tax cuts across the board.[1]
Passed by the69th Congress, it was signed into law byPresidentCalvin Coolidge.
The act was applicable to incomes for 1925 and thereafter.[2]
A rate of 13.5 percent was levied on the net income of corporations.
A normal tax and a surtax were levied against the net income of individuals as shown in the following table.
| Net Income (dollars) | Normal Rate (percent) | Surtax Rate (percent) | Combined Rate (percent) |
|---|---|---|---|
| 0 | 1.5 | 0 | 1.5 |
| 4,000 | 3 | 0 | 3 |
| 8,000 | 5 | 0 | 5 |
| 10,000 | 5 | 1 | 6 |
| 14,000 | 5 | 2 | 7 |
| 16,000 | 5 | 3 | 8 |
| 18,000 | 5 | 4 | 9 |
| 20,000 | 5 | 5 | 10 |
| 22,000 | 5 | 6 | 11 |
| 24,000 | 5 | 7 | 12 |
| 28,000 | 5 | 8 | 13 |
| 32,000 | 5 | 9 | 14 |
| 36,000 | 5 | 10 | 15 |
| 40,000 | 5 | 11 | 16 |
| 44,000 | 5 | 12 | 17 |
| 48,000 | 5 | 13 | 18 |
| 52,000 | 5 | 14 | 19 |
| 56,000 | 5 | 15 | 20 |
| 60,000 | 5 | 16 | 21 |
| 64,000 | 5 | 17 | 22 |
| 70,000 | 5 | 18 | 23 |
| 80,000 | 5 | 19 | 24 |
| 100,000 | 5 | 20 | 25 |
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