excess-profits tax

excess-profits tax

[ek-ses prof-its]
noun
a tax on the profits of a business enterprise in excess of the average profits for a number of base years, or of a specified rate of return on capital.

Origin:
1910–15

Dictionary.com Unabridged
Based on the Random House Dictionary, © Random House, Inc. 2014.
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Encyclopedia Britannica
Encyclopedia

excess-profits tax

a tax levied on profits in excess of a stipulated standard of "normal" income. There are two principles governing the determination of excess profits. One, known as the war-profits principle, is designed to recapture wartime increases in income over normal peacetime profits of the taxpayer. The other, identified as the high-profits principle, is based on income in excess of some statutory rate of return on invested capital

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Encyclopedia Britannica, 2008. Encyclopedia Britannica Online.
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