excess profits tax

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excess profits tax,

levy on any profit above a standard level. Chiefly a wartime phenomenon, it is intended to increase revenue during periods of distress and to prevent businessmen from taking unfair advantage of the increased government spending and consumer demand that normally accompany wars. In 1917 the U.S. federal government adopted such a tax, which continued in various forms and at increasing rates until 1921. It was revived by federal legislation during World War II and during the Korean War. The tax was imposed on the excess over a firm's peacetime earnings or over an arbitrarily decreed earning rate. Great Britain levied an excess profits tax from 1915 to 1921, with a rate varying from 40% to 80%. During the era of World War II, Britain's excess profits tax was revived, with tax rates increased to 100%. Critics contend that such levies discourage productive enterprise by eliminating the profit motive.
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law allows taxpayers to claim a credit for foreign income, war profits, and excess profits taxes paid or accrued.
Cumulative returns on the Karakuduk field have now reached a level that requires ZAO Karakudukmunay to pay Excess Profits Taxes.
Finally, the instructions require the translation of the provision for income, war profits, and excess profits taxes (line 20 of Schedule C) at the average exchange rate for the year.
901(b)(1), taxpayers can claim a credit for "the amount of any income, war profits, and excess profits taxes paid or accrued .
Line 1 of Schedule H (Current Earnings and Profits) currently requires taxpayers to submit the "[c]urrent year net income or loss before any reduction for any income, war profits, and excess profits taxes.

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