excess profits tax

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Excess profits tax

Additional federal taxes placed on the earnings of a business, used only in time of national emergency such as war.

Excess Profits Tax

A tax imposed on a company's profits over a certain amount. Excess profit taxes are imposed in order to generate more revenue for the government, especially during national emergencies. In the United States, excess profit taxes have been implemented during wartime. There are also periodic debates on whether to impose an excess profit tax on private industries thought to be necessary for consumers in order to discourage profiteering or price gouging. Particularly, oil and gas companies have been targeted for this form of the excess profit tax. See also: Windfall Tax.

excess profits tax

A temporary tax levied on business profits during a period of national emergency. For example, the federal government may levy an additional corporate income tax during wartime to generate extra government revenues.
References in periodicals archive ?
93) According to the Wall Street Journal, "Odds favor[ed] an increase in corporate taxes next year [in 1949], probably in the form of an excess-profits tax.
The National Industrial Recovery Act of 1933 required corporations to pay an excess-profits tax based on a capital stock's declared value.
Urged on by Truman and others in Congress, President Roosevelt supported broad increases in the corporate income tax, raised the excess-profits tax to 90 percent and charged the Office of War Mobilization with the task of eliminating illegal profits.
One way around this obstacle would be to levy a one-time excess-profits tax on the increase in wealth over a specific period of time, which is simply a variation of the income tax.