Public Laws

Public Law 65-254
Revenue Act of 1918

Summary

The Revenue Act of 1918, 40 Stat. 1057, raised income tax rates after recent previous tax increases. The bottom tax bracket was expanded but raised from 2% to 6%.

The act simplified the tax structure created by the 1917 act. Instead of applying a “like normal tax” and a “like additional tax” to the 1916 act normal tax and additional tax it created a single tax structure with a Normal Tax and a Surtax.

The top rate was increased to 77%, and applied to income above $1,000,000. The top rate of the War Revenue Act of 1917 had taxed all income above $2,000,000 at a 67% rate.

The act was applicable to incomes for 1918. For 1919 and 1920 the top normal tax rate was reduced from 12 percent to 8%. This reduced the top marginal tax rate that combined normal tax and surtax from 77% to 73%.

In 1918, approximately 5% of the population paid federal income taxes (an increase from 1% in 1913). Even so, the income tax funded one-third of the cost of World War I.

[Pub. L. 065-254 – Revenue Act of 1918, (65th Congress) 40 Stat. 1057]

General  Information

Public Law: Pub. L. 65-254

Stat. At Large: 40 Stat. 1057

Enacted: February 24,1919

Bill Number: H.R. 12863 (65th Congress)

Sponsor: 

Note: Section 1303 of this Act provided for the “Legislative Drafting Service”, which was the precursor to the House Office of Legislative Counsel. 

Applicable Text of Statute

Sec. 1303. (a) That there is hereby created a Legislative Drafting Service under the direction of two draftsmen, one of whom shall be appointed by the President of the Senate, and one by the Speaker of the House of Representatives, without reference to political affiliations and solely on the ground of fitness to perform the duties of the office. Each draftsman shall receive a salary of $5,000 a year, payable monthly. The draftsmen shall, subject to the approval of the President of the Senate and the Speaker of the House of Representatives, employ and fix the compensation of such assistant drafts- men, clerks, and other employees, and purchase such furniture, office equipment, books, stationery, and other supplies, as may be necessary for the proper performance of the duties of the service and as may be appropriated for by Congress.

(b) The Drafting Service shall aid in drafting public bills and resolutions or amendments thereto on the request of any committee of either House of Congress, but the Library Committee of the Senate and the Library Committee of the House of Representatives, respectively, may determine the preference, if any, to be given to such requests of the committees of either House, respectively. The draftsmen shall, from time to time, prescribe rules and regulations for the conduct of the work of the service for the committees of each House, subject to the approval of the Library Committee of each House, respectively.

(c) For the remainder of the current fiscal year there is hereby appropriated, out of any money in the Treasury not otherwise appropriated, the sum of $25,000, or so much thereof as may be necessary, for the purpose of defraying the expenses of the establishment and maintenance of the service, including the payment of salaries herein authorized. One-half of all appropriations for the service shall be disbursed by the Secretary of the Senate and one-half by the Clerk of the House of Representatives.

Codification to the U.S. Code
CHAPTER 9—OFFICE OF LEGISLATIVE COUNSEL (sections 271 to 282e)