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About: Revenue Act of 1916     Goto   Sponge   NotDistinct   Permalink

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The United States Revenue Act of 1916, (ch. 463, 39 Stat. 756, September 8, 1916) raised the lowest income tax rate from 1% to 2% and raised the top rate to 15% on taxpayers with incomes above $2 million ($49.8 million in 2021 dollars). Previously, the top rate had been 7% on income above $500,000 ($12.5 million in 2021 dollars). The Act also instituted the federal estate tax. The entry of the United States into World War I greatly increased the need for revenue. An excess profits tax was introduced and the modern estate tax was imposed. The act was applicable to incomes for 1916.