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 ?
Nonetheless, McLure and Zodrow demonstrate that from an economic standpoint, both of these taxes are equivalent to an excess profits tax.
71% of excess profits for all taxpayers, which would strongly suggest an excess profits tax.
How outlier companies (which are only outliers in the excess profits tax sense) are characterized, then, has real meaning for understanding the true intent of the tax (excess profits tax or tax on value).
In May of 1945, the Joint Committee announced a "five point program" involving increased excess profits tax exemptions and provisions such as accelerated refund provisions for loss carrybacks and amortization deductions, "designed to improve the cash position of business.
The excess profits tax had long been opposed by business, but this opposition only grew stronger with the end of the war.
The Committee's report in favor of broader corporate tax reform did nothing to deter opposition to the deferral of excess profits tax repeal.
This focus on the excess profits tax was certainly not itself a rejection of corporate tax reform, although it effectively served that end.
Several factors likely contributed to the continued deferral of corporate tax reform even after the excess profits tax controversy passed.
Excess profits tax repeal also permitted politicians to call for a shift from business-tax relief to individual-tax relief.
The excess profits tax would act as a levy on bank profits beyond a certain level, but a balance sheet tax would have the advantage of encouraging banks not to build excessively large stocks of assets - one of the key issues at crisis-hit Royal Bank of Scotland.
The excess profits tax would act as a levy on bank profits, but a balance sheet tax would have the advantage of encouraging banks not to build excessively large stocks of assets.
It was taken into account, as either a deduction or a credit, for the income tax and the other excess profits tax.
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