The United States

United States

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

 War Revenue Act of 1917 greatly increased federal income tax

Income tax

An income tax is a tax levied on the income of individuals or businesses . Various income tax systems exist, with varying degrees of tax incidence. Income taxation can be progressive, proportional, or regressive. When the tax is levied on the income of companies, it is often called a corporate...

 rates while simultaneously lowering exemptions.

The 2% bracket had previously applied to income below $20,000. That amount was lowered to $2,000. The top bracket (on income above $2 million) was raised from 15% to 67%.

The act was applicable to incomes for 1917.

War Income Tax for Individuals

In addition to the Normal Tax and an Additional Tax levied against the net income of individuals in the Revenue Act of 1916

Revenue Act of 1916

The United States Revenue Act of 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...

a
"like normal" tax and a "like additional" tax were levied against the net income of individuals as shown in the following table.

Revenue Act of 1917 War Income Tax on Individuals
	Tax Rates from 1916 Act		Tax Rates from 1917 Act
Net Income (dollars)	Normal Rate (percent)	Additional Rate (percent)	Like Normal Rate (percent)	Like Additional Rate (percent)	Combined Rate (percent)
0	2	0	2	0	4
5,000	2	0	2	1	5
7,500	2	0	2	2	6
10,000	2	0	2	3	7
12,500	2	0	2	4	8
15,000	2	0	2	5	9
20,000	2	1	2	7	10
40,000	2	2	2	10	16
60,000	2	3	2	14	21
80,000	2	4	2	18	26
100,000	2	5	2	22	31
150,000	2	6	2	25	35
200,000	2	7	2	30	41
250,000	2	8	2	34	46
300,000	2	9	2	37	50
500,000	2	10	2	40	54
750,000	2	10	2	45	59
1,000,000	2	11	2	50	65
1,500,000	2	12	2	50	66
2,000,000	2	13	2	50	67

• Exemption of $3,000 for single filers and $4,000 for married couples or heads of household.

Inflation-adjusted numbers

Corrected for inflation by CPI:

1917 dollars	2005 dollars
$2,000	$30,516
$20,000	$305,156
$2,000,000	$30,515,625