The Revenue Act of 1936, (June 22, 1936), established an "undistributed profits tax" on corporations in the United States .
It was signed into law by President Franklin D. Roosevelt.
The act was applicable to incomes for 1936 and thereafter. Roosevelt sought additional permanent revenue of $620,000,000 and temporary revenue of $517,000,000. To secure the permanent revenue he suggested the substitution of a tax on undistributed earnings of corporations. Individual rates were raised only on the very rich (that is, income over $5 million a year.).
A Normal Tax was levied on the net income of corporations as shown in the following table.
A Surtax was levied on corporations on "undistributed profits", i.e. profits not paid out in dividends, as shown in the following table.
A normal tax and a surtax were levied against the net income of individuals as shown in the following table.