The United States Revenue Act of 1921 was the first Republican tax reduction following their landslide victory in the 1920 federal elections. New Secretary of the Treasury Andrew Mellon argued that significant tax reduction was necessary in order to spur economic expansion and restore prosperity.
History
The bill passed the House on August 20, 1921. It was passed by the Senate in amended form on November 7, 1921. It was sent to conference on November 10 before the House on November 21 and the Senate on November 23 voted in favor of a new version of the bill. President Harding signed the bill on November 23, 1921. == Tax on Corporations ==
Tax on Corporations
In 1921 a rate of 10 percent was levied on the net income of corporations and 12.5 percent levied thereafter. == Tax on Individuals ==
Tax on Individuals
A Normal Tax and a Surtax were levied against the net income of individuals as shown in the following table. • Exemption of $1,000 for single filers and $2,500 for married couples and heads of family. A $400 exemption for each dependent under 18. Married couple exemption is reduced to $2,000 for net income over $5,000. == References ==