Commissioner of Internal Revenue 1940
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The Background of the Revenue Act of 1937
THE BACKGROUND OF THE REVENUE ACT OF 1937 RANDOLPzH E. PAUL* O N AUGUST 28, 1894, Congress enacted what was then considered a drastic income tax statute.' It carried a rate of 2%. The stat- ute was regarded by many with horror. Mr. Joseph H. Choate, then a leader of the New York bar, called the act "communistic in its pur- poses and tendencies," and confiscatory. 3 Words momentarily failed even Mr. Choate before the Supreme *Court, but he managed to label the prin- ciples upon which the tax was defended in that court as "communistic, socialistic-what shall I call them-populistic4 as ever have been ad- dressed to any political assembly in the world." s No attempt was made to circumvent this outrageous "direct" tax upon property. None was ever necessary. A direct frontal attack was made in the famous Pollock case and was successful by the recently noteworthy margin of five to four. Th6 decision, dose as it was, "forcibly interred"6 the contested statute and the nineteenth century had a peaceful ending. Taxpayers were safe until orderly constitutional process made the six- teenth Amendment effective on February 25, I913 Jand "direct" income taxation was possible without the impossible8 apportionment requirement. On this day the peace won by Mr. Choate proved merely a truce, and war was declared. In the beginning it was a quiet, good-natured conflictY It * Member of the New York bar. '28 Stat. 553 (1894), 31 U.S.C.A., § 372 (1929). 2 Pollock v. Farmers' Loan & Trust Co., 157 U.S. 429, 532 (1895). -
Table of Contents
Table of Contents Preface ..................................................................................................... ix Introductory Notes to Tables ................................................................. xi Chapter A: Selected Economic Statistics ............................................... 1 A1. Resident Population of the United States ............................................................................3 A2. Resident Population by State ..............................................................................................4 A3. Number of Households in the United States .......................................................................6 A4. Total Population by Age Group............................................................................................7 A5. Total Population by Age Group, Percentages .......................................................................8 A6. Civilian Labor Force by Employment Status .......................................................................9 A7. Gross Domestic Product, Net National Product, and National Income ...................................................................................................10 A8. Gross Domestic Product by Component ..........................................................................11 A9. State Gross Domestic Product...........................................................................................12 A10. Selected Economic Measures, Rates of Change...............................................................14 -
"Relief" Provisions in the Revenue Act of 1943
"RELIEF" PROVISIONS IN THE REVENUE ACT OF 1943 By JAMES E. FAHEY t THE Revenue Act of 1943 1 is an anomaly in the framework of income tax legislation.2 Its most obvious distinction lies in the manner of its enactment. It is the first revenue raising measure ever to be vetoed by a president and the first ever to be passed over veto. The political storm which engulfed Congress and the President over the bill's passage cen- tered in large measure over the so-called "relief" provisions found in the bill. These provisions alternately have been defended as accomplishing the correction of existing inequities in the law and assailed as providing loopholes enabling certain favored individuals and industries to avoid their equitable share in financing the war. A scrutinization of these con- troversial provisions in the light of the situations which they were de- signed to change may serve to focus the issue more clearly for the reader whose opinions are yet to be crystallized. Specifically, the President's veto message ' criticized five "relief" pro- visions in the bill as being special privilege measures. They were the provision for non-recognition of gain or loss on corporate reorganiza- tions carried on under court supervision and the concomitant "basis" provision,4 the extension of percentage depletion to certain minerals which were theretofore denied its use,' a provision making optional to taxpay- ers in the timber or logging business an accounting procedure which would enable them to treat the cutting of their timber as the sale of a capital asset,6 the extension of favored excess profits tax treatment formerly given only to producers of minerals and timber to producers of natural gas,7 and a broadening of the existing exemption of air mail carriers from excess profits taxes.8 t fember of the Kentucky Bar; Lecturer in Taxation, University of Louisville Law School. -
The Revenue Act of 1934
March, 1935 THE REVENUE ACT OF 1934 GEORGE GRAYSON TYLER t AND JOHN P. OHL X Congress, probably inspired by the disclosures of the investigations of the Banking and Currency Committee, passed House Resolution 183, on June 9, 1933, thereby authorizing the Ways and Means Committee to in- vestigate methods of preventing the evasion and avoidance of taxes, means of simplifying the revenue laws and possible new sources of revenue. Pur- suant to this Resolution, a Subcommittee of the Committee on \Ways and Means conducted an inquiry prior to the convening of the second session of the 73d Congress. The Subcommittee filed "A Preliminary Report" ' on December 4, 1933, upon the subjects, of tax avoidance, evasion and sim- plification. In response to the Subcommittee's recommendations, the then Acting Secretary of the Treasury, Henry Morgenthau, Jr., issued a state- ment 2 differing in many important particulars from the conclusions reached by the Subcommittee. As a result of the above investigations, H. R. 7835 was introduced in the House and referred to the Committee on Ways and Means. After extensive hearings 3 the bill was reported out with amendments by the Com- 4 mittee and a report was submitted thereon. On February 21, 1934, the House passed the bill with minor committee amendments. 5 Then, having been introduced in the Senate, the bill was referred to the Finance Com- mittee, which, after further hearings,0 reported it 7 with substantial amend- ments. Further material changes were made on the floor of the Senate s before passage. Thereafter, the Conference Committee on the disagreeing votes of the two Houses made its recommendations reconciling the differ- j- Formerly assistant to Professor Roswell Magill, former assistant to the Secretary of the Treasury; member of the New York Bar. -
REVIEW of INTERNAL REVENUE CODE SECTION 501(C)(3) REQUIREMENTS for RELIGIOUS ORGANIZATIONS
REVIEW OF INTERNAL REVENUE CODE SECTION 501(c)(3) REQUIREMENTS FOR RELIGIOUS ORGANIZATIONS HEARING BEFORE THE SUBCOMMITTEE ON OVERSIGHT OF THE COMMITTEE ON WAYS AND MEANS HOUSE OF REPRESENTATIVES ONE HUNDRED SEVENTH CONGRESS SECOND SESSION MAY 14, 2002 Serial No. 107–69 Printed for the use of the Committee on Ways and Means ( U.S. GOVERNMENT PRINTING OFFICE 80–331 WASHINGTON : 2002 For sale by the Superintendent of Documents, U.S. Government Printing Office Internet: bookstore.gpo.gov Phone: toll free (866) 512–1800; DC area (202) 512–1800 Fax: (202) 512–2250 Mail: Stop SSOP, Washington, DC 20402–0001 VerDate 11-MAY-2000 01:17 Aug 15, 2002 Jkt 010199 PO 00000 Frm 00001 Fmt 5011 Sfmt 5011 W:\DISC\80331.XXX txed01 PsN: txed01 COMMITTEE ON WAYS AND MEANS BILL THOMAS, California, Chairman PHILIP M. CRANE, Illinois CHARLES B. RANGEL, New York E. CLAY SHAW, JR., Florida FORTNEY PETE STARK, California NANCY L. JOHNSON, Connecticut ROBERT T. MATSUI, California AMO HOUGHTON, New York WILLIAM J. COYNE, Pennsylvania WALLY HERGER, California SANDER M. LEVIN, Michigan JIM MCCRERY, Louisiana BENJAMIN L. CARDIN, Maryland DAVE CAMP, Michigan JIM MCDERMOTT, Washington JIM RAMSTAD, Minnesota GERALD D. KLECZKA, Wisconsin JIM NUSSLE, Iowa JOHN LEWIS, Georgia SAM JOHNSON, Texas RICHARD E. NEAL, Massachusetts JENNIFER DUNN, Washington MICHAEL R. MCNULTY, New York MAC COLLINS, Georgia WILLIAM J. JEFFERSON, Louisiana ROB PORTMAN, Ohio JOHN S. TANNER, Tennessee PHIL ENGLISH, Pennsylvania XAVIER BECERRA, California WES WATKINS, Oklahoma KAREN L. THURMAN, Florida J.D. HAYWORTH, Arizona LLOYD DOGGETT, Texas JERRY WELLER, Illinois EARL POMEROY, North Dakota KENNY C. -
FEDERAL REGISTE 7 5 * ' 1934 NUMBER 154 VOLUME 8 ^ T/A F It E O ^
^ O N A M * . ^ 1 I ITTCOA'll FEDERAL REGISTE 7 5 * ' 1934 NUMBER 154 VOLUME 8 ^ t/A f iT E O ^ Washington, Thursday, August 5, 1943 Regulations the percentage that the simple average CONTENTS of the yields of sugar beets^in tons per acre planted on the farm in such year REGULATIONS AND NOTICES TITLE 7—AGRICULTURE or years is of the simple average of the Alien Property Custodian: . PaSe county average yields of sugar beets for Chapter VIII—War Food Administration Vesting orders: such year or years, except that the Abandoned patent applica normal yield for such farm shall not be P art 802—Sugar Determinations tions, nationals of: less than 80 percent nor more than 120 Enemy countries_________ 10911 NORMAL YIELDS OF COMMERCIALLY RECOVER percent of the county normal yield; and Enemy-occupied countries- 10911 ABLE SUGAR PER ACRE FOR SUGAR BEETS (in) For a farm on which sugar beets Avenarius, R., & Co-------------- 10913 (REVISED) were not planted in any of the next Bituminous Coal Division: Pursuant to the provisions of section preceding seven years, 90’ percent of the Minimum price schedules 303 of the Sugar Act of 1937, as.amended, county normal yield of sugar beets. amended: and Executive Order No. 9322, issued (3) The “county average yield” of , District 4_________________ 10885 March 26,1943, as amended by Executive sugar beets shall be: District 7 (2 documents)__ 10886, Order No. 9334, issued April 19, 1943, the (i) For each of the years 1936-1941, in 10888 following determination is hereby issued: clusive, the yield established, -
Political Hot Potato: How Closing Loopholes Can Get Policymakers Cooked Stephanie Hunter Mcmahon
Journal of Legislation Volume 37 | Issue 2 Article 1 5-1-2011 Political Hot Potato: How Closing Loopholes Can Get Policymakers Cooked Stephanie Hunter McMahon Follow this and additional works at: http://scholarship.law.nd.edu/jleg Recommended Citation McMahon, Stephanie Hunter (2011) "Political Hot Potato: How Closing Loopholes Can Get Policymakers Cooked," Journal of Legislation: Vol. 37: Iss. 2, Article 1. Available at: http://scholarship.law.nd.edu/jleg/vol37/iss2/1 This Article is brought to you for free and open access by the Journal of Legislation at NDLScholarship. It has been accepted for inclusion in Journal of Legislation by an authorized administrator of NDLScholarship. For more information, please contact [email protected]. POLITICAL HOT POTATO: HOW CLOSING LOOPHOLES CAN GET POLICYMAKERS COOKED Stephanie HunterMcMahon* ABSTRACT Loopholes in the law are weaknesses that allow the law to be circumvented Once created, they prove hard to eliminate. A case study of the evolving tax unit used in the federal income tax explores policymakers' response to loopholes. The 1913 income tax created an opportunity for wealthy married couples to shift ownership of family income between spouses, then to file separately, and, as a result, to reduce their collective taxes. In 1948, Congress closed this loophole by extending the income-splitting benefit to all married taxpayers filing jointly. Congress acted only after the federal judiciary and Treasury Department pleaded for congressional reform and, receiving none, reduced their roles policing wealthy couples' tax abuse. The other branches would no longer accept the delegated power to regulate the tax unit. By examining these developments, this article explores the impact of the separation of powers on the closing of loopholes and adds to our understandingof how the government operates. -
Depreciation Policy: Whither Thou Goest
SMU Law Review Volume 32 Issue 2 Article 1 1978 Depreciation Policy: Whither Thou Goest Henry J. Lischer Jr. Follow this and additional works at: https://scholar.smu.edu/smulr Recommended Citation Henry J. Lischer, Depreciation Policy: Whither Thou Goest, 32 SW L.J. 545 (1978) https://scholar.smu.edu/smulr/vol32/iss2/1 This Article is brought to you for free and open access by the Law Journals at SMU Scholar. It has been accepted for inclusion in SMU Law Review by an authorized administrator of SMU Scholar. For more information, please visit http://digitalrepository.smu.edu. DEPRECIATION POLICY: WHITHER THOU GOEST by Henry J. Lischer, Jr.* TABLE OF CONTENTS I. HISTORY OF DEPRECIATION .................................................. 546 A. Financial Accounting History ........................................ 547 B. United States Tax History Through 1968 .......................... 550 II. CONTEMPORARY DEPRECIATION ............................................. 563 A. Tax Shelters and the Tax Reform Act of 1969 ................... 563 B. ADR Depreciation and the Revenue Act of 1971 ................ 567 C. The Tax Reform Act of 1976 ......................................... 569 D. Theoretical Bases for Contemporary Depreciation ............. 571 E. Purposes of Contemporary Depreciation ......................... 573 III. MODIFICATION PROPOSALS ................................................... 573 A. Inflation Adjusted Depreciation ..................................... 573 B. Other Proposed Modifications to Depreciation ................. -
Corporate Taxation and the Regulation of Early Twentieth-Century American Business
Corporate Taxation and the Regulation of Early Twentieth-Century American Business Steven A. Bank UCLA School of Law Ajay K. Mehrotra Maurer School of Law & History Department Indiana University, Bloomington Abstract: In the early twentieth century, the taxation of modern business corporations became increasingly important to the development of American democracy. During that time, governments at all levels began to view business corporations not only as sources of badly needed public revenue, but also as potentially dangerous wielders of concentrated economic power. To combat the growing dominance of corporations, many fiscal reformers sought to use corporate taxation as a mode of regulatory governance. This paper explores the motives and intentions of fiscal reformers during critical junctures in the development of early twentieth- century U.S. corporate taxation. It seeks to explain how changing historical conditions shaped corporate tax law and policy. More specifically, this paper investigates why activists in the first half of the twentieth century turned to taxation in particular as a technique of corporate regulation. By focusing on the pivotal ideas and actions of key political economists, social commentators, and lawmakers, this paper attempts to answer the question: why did reformers see taxation as a viable form of public control over corporate power? We argue that the corporate tax emerged and developed in the manner it did as a compromise among competing factions and contrasting circumstances. For some, the corporate tax held the potential for controlling, or even reversing, the growth of corporate power. In the wake of corporate scandals, the collection and possible publicity of corporate information by the federal government was seen as one specific way to regulate large-scale industrial corporations. -
The Federal Excise Tax on Gasoline and the Highway Trust Fund: a Short History
Order Code RL30304 CRS Report for Congress Received through the CRS Web The Federal Excise Tax on Gasoline and the Highway Trust Fund: A Short History Updated April 4, 2006 Pamela J. Jackson Analyst in Public Sector Economics Government and Finance Division Congressional Research Service ˜ The Library of Congress The Federal Excise Tax on Gasoline and the Highway Trust Fund: A Short History Summary Excise taxes have long been a part of our country’s revenue history. In the field of gasoline taxation, the states led the way with Oregon enacting the first tax on motor fuels in 1919. By 1932, all states and the District of Columbia had followed suit with tax rates that ranged between two and seven cents per gallon. The federal government first imposed its excise tax on gasoline at a one-cent per gallon rate in 1932. The gas tax was enacted to correct a federal budgetary imbalance. It continued to support general revenue during World War II and the Korean War. Economists know the gasoline excise tax as a “manufacturer’s excise tax” because the government imposes it at production (i.e., the producer, refiner, or importer) for efficiency in collection. Particularly in the short run, when the demand for gasoline is relatively inelastic, economists recognize any increase in the gasoline tax is generally passed forward to the retailer, translating into a higher retail gas sales price. Thus, the burden for much of the tax ultimately falls on the consumer. The Highway Revenue Act of 1956 established the federal Highway Trust Fund for the direct purpose of funding the construction of an interstate highway system, and aiding in the finance of primary, secondary, and urban routes. -
Tax, Corporate Governance, and Norms Steven A
Washington and Lee Law Review Volume 61 | Issue 3 Article 4 Summer 6-1-2004 Tax, Corporate Governance, and Norms Steven A. Bank Follow this and additional works at: https://scholarlycommons.law.wlu.edu/wlulr Part of the Business Organizations Law Commons, and the Tax Law Commons Recommended Citation Steven A. Bank, Tax, Corporate Governance, and Norms, 61 Wash. & Lee L. Rev. 1159 (2004), https://scholarlycommons.law.wlu.edu/wlulr/vol61/iss3/4 This Article is brought to you for free and open access by the Washington and Lee Law Review at Washington & Lee University School of Law Scholarly Commons. It has been accepted for inclusion in Washington and Lee Law Review by an authorized editor of Washington & Lee University School of Law Scholarly Commons. For more information, please contact [email protected]. Tax, Corporate Governance, and Norms Steven A. Bank* Abstract This Article examines the use offederal tax provisions to effect changes in state law corporategovernance. There is a growingacademic controversy over these provisions,fueled in part by their popularityamong legislators as a method of addressing the recent spate of corporatescandals. As a case study on the use of tax to regulate corporategovernance, this paper compares and contrasts two measures enacted during the New Deal-the enactment of the undistributedprofits tax in 1936 and the overhaul of the tax-free reorganizationprovisions in 1934-and considers why theformer was so much more controversialand less sustainablethan the latter. While some of the difference can be explained by the different political and economic circumstances surrounding each proposal, this Article argues that the divergence in the degree of opposition can be explained in part by an examination of the extent to which each provision threatened an underlying norm, or longstanding standard,of corporate behavior. -
Iii. the Excess Profits Tax of 1940
19401 EXCESS PROFITS TAX labor records of potential contractors. 132 And where competitive bids are submitted, the Comptroller General has ruled that violations of the labor policies enunciated by the Defense Commission are sufficient grounds for rejecting the lowest bid.' 33 But whether social reforms will survive a direct conflict with industrial mobilization remains a question for the future. And other problems not con- templated by existing legislation and regulations will arise if the emergency long continues. Dislocations of the price system may require rigid controls. Provisions may be necessary to protect the financial and credit structure from the coming shock. Finally, the end of the emergency will bring prob- lems of demobilizing an abnormally accelerated and over-expanded produc- tion economy. !11.THE EXCESS PROFITS TAX OF 1940 A DEFENSE program requires money as well as machines and men. Although business can legitimately be expected to contribute its share through taxes, too heavy a burden will hinder the forces of production. Yet the morale of labor, consumers, and prospective draftees cannot be preserved if it is felt that a national emergency is being turned to private profit.1 In response to these diverse demands there has emerged the Excess Profits Tax Act of 1940.2 132. Comptroller General Dec., No. B-12733, Oct 9, 1940, (1940) 9 U. S. L. Wm 2237. 133. (1940) 9 U. S. L WzEic 2231. But compliance with the Act cannot be made a condition precedent to payment of contract price. Comptroller General Dec., No. B-10575, July 8, 1940, (1940) 9 U. S.