The Revenue Act of 1936, (June 22, 1936), established an "undistributed profits tax" on corporations in the United States

United States

The United States of America is a federal constitutional republic comprising fifty states and a federal district...

 .

It was signed into law by President

President of the United States

The President of the United States of America is the head of state and head of government of the United States. The president leads the executive branch of the federal government and is the commander-in-chief of the United States Armed Forces....

 Franklin D. Roosevelt

Franklin D. Roosevelt

Franklin Delano Roosevelt , also known by his initials, FDR, was the 32nd President of the United States and a central figure in world events during the mid-20th century, leading the United States during a time of worldwide economic crisis and world war...

.

The act was applicable to incomes for 1936 and thereafter.

Normal tax

A Normal Tax was levied on the net income

Net income

Net income is the residual income of a firm after adding total revenue and gains and subtracting all expenses and losses for the reporting period. Net income can be distributed among holders of common stock as a dividend or held by the firm as an addition to retained earnings...

of corporations as shown in the following table.

Revenue Act of 1936 Tax on Corporations
Net Income (dollars)	Rate (percent)
0	8
2,000	11
15,000	13
40,000	15

Surtax on undistributed profits

A Surtax was levied on corporations on "undistributed profits", i.e. profits not paid out in dividends, as shown in the following table.

Revenue Act of 1936 Surtax on Undistributed Profits
Application (percent of undistributed net income)	Surtax Rate (percent)
up to 10	7
from 10 to 20	12
from 20 to 40	17
from 40 to 60	22
over 60	27

Tax on individuals

A normal tax and a surtax were levied against the net income of individuals as shown in the following table.

Revenue Act of 1936 Normal Tax and Surtax on Individuals
Net Income (dollars)	Normal Rate (percent)	Surtax Rate (percent)	Combined Rate (percent)
0	4	0	4
4,000	4	4	8
6,000	4	5	9
8,000	4	6	10
10,000	4	7	11
12,000	4	8	12
14,000	4	9	13
16,000	4	11	15
18,000	4	13	17
20,000	4	15	19
22,000	4	17	21
24,000	4	17	21
26,000	4	19	23
32,000	4	21	25
38,000	4	24	28
44,000	4	27	31
50,000	4	31	35
56,000	4	35	39
58,000	4	35	39
62,000	4	39	43
68,000	4	43	47
74,000	4	47	51
80,000	4	51	55
90,000	4	55	59
100,000	4	58	62
150,000	4	60	64
200,000	4	62	66
250,000	4	64	68
300,000	4	66	70
400,000	4	68	72
500,000	4	70	74
750,000	4	72	76
1,000,000	4	73	77
2,000,000	4	74	78
5,000,000	4	75	79

• Exemption of $1,000 for single filers and $2,500 for married couples and heads of family. A $400 exemption for each dependent under 18.