ABSTRACT
This chapter briefly discusses the history and background of United States taxation and the distinctions between economic, accounting and taxable income and deductions. It turns now to a survey of the multiplicity of taxes which are to-day in effect. The measure of the tax is gross taxable income, less certain deductions specifically authorised by statute. The incidence of income taxes on corporate taxpayers in the United States is demonstrated by the fact that approximately 50 per cent, of all such taxes and 41 per cent, of all Federal tax revenues are now collected from that group. The effect of this double taxation can be seen in the following illustration: Assume a corporation has taxable net income of $1 million and, in order to show the minimum effect of the example, assume that its excess profits credit is sufficiently large to eliminate excess profits taxes.
