53 Stat. 10.
26 U. S. C. § 22 (b)

taxable year beginning after December 31, 1940. For the
purposes of this subparagraph, in determining whether
obligations which are described in section 22 (b) (4) any part
of the interest from which is excludible from gross income (4).
or allowable as a credit against net income are to be treated
as admissible or inadmissible assets, such obligations shall
be treated in the same manner as they are treated for the
taxable year for which tax under this subchapter is being
computed.

"(E) Maximum New Capital Allowable.-The new capital
for any day of the taxable year shall not be more than the
amount, if any, by which-

"(i) the sum of the equity invested capital (computed without regard to this paragraph) and the borrowed capital (as defined in section 719 (a)) of the taxpayer as of such day, reduced by the amount of money or property paid in which is excluded by reason of the limitation of subparagraph (A) or (B) of this paragraph,

exceeds

"(ii) the sum of such equity invested capital and borrowed capital as of the beginning of the first day of such taxpayer's first taxable year beginning after December 31, 1940, reduced by the amount, if any, by which the accumulated earnings and profits as of such first day of such first taxable year exceed the accumulated earnings and profits (computed without regard to distributions made in taxable years beginning after December 31, 1940) as of the beginning of the first day of the taxable year for which the tax under this subchapter is being computed.

"(F) Reduction on Account of Distributions Out of Pre1941 Accumulated Earnings and Profits.-The new capital for any day of the taxable year, computed without the application of subparagraph (E), shall be reduced by the amount which, after the beginning of the first taxable year which begins after December 31, 1940, has been distributed out of earnings and profits accumulated prior to the beginning of such first taxable year."

SEC. 204. CORPORATIONS ENGAGED IN MINING STRATEGIC METALS.

Section 731 of the Internal Revenue Code (exempting from excessprofits tax income derived from mining certain metals) shall not apply with respect to any taxable year beginning after December 31, 1940.

SEC. 205. TAXABLE YEARS TO WHICH AMENDMENTS APPLICABLE.
The amendments made by this title shall be applicable only with
respect to taxable years beginning after December 31, 1940.
TITLE III-CAPITAL STOCK TAX AND DECLARED
VALUE EXCESS-PROFITS TAX

SEC. 301. CAPITAL STOCK TAX.

54 Stat. 984.

26 U. S. C. § 719 (a).

54 Stat. 990.
26 U. S. C. § 731.

53 Stat. 169.
26 U.S. C. § 1200 (a),

(a) INCREASE IN RATE OF TAX.-Section 1200 (a) and (b) of the Internal Revenue Code (relating to rate of capital stock tax) is (b). amended by striking out "$1" and inserting in lieu thereof "$1.25". (b) DEFENSE TAX RATE.-Section 1200 (c) of the Internal Revenue Code is repealed.

54 Stat. 521.
26 U.S. C. § 1200 (c).

53 Stat. 171.

26 U. S. C. § 1203 (b) (2).

53 Stat. 111; 54 Stat. 521.

26 U. S. C. § 600.

53 Stat. 141.

26 U. S. C. § 935 (b).

(c) RETURNS FOR 1941.-Section 1203 (b) (2) of the Internal Revenue Code (relating to extensions of time for filing capital-stock tax returns) is amended by inserting at the end thereof the following: "With respect to the year ending June 30, 1941, the extension may be for not more than ninety days.".

(d) EFFECTIVE DATE.-This section shall be effective only with respect to the year ending June 30, 1941, and succeeding years.

SEC. 302. DECLARED VALUE EXCESS PROFITS TAX-DEFENSE TAX
RATES INCORPORATED IN RATE SCHEDULE.

(a) RATES.-Section 600 of the Internal Revenue Code (relating to rate of declared value excess profits tax) is amended as follows:

(1) By striking out the heading "(a) GENERAL RULE.—"; (2) By amending the rate schedule to read as follows: "61% per centum of such portion of its net income for such income-tax taxable year as is in excess of 10 per centum and not in excess of 15 per centum of the adjusted declared value;

"13 per centum of such portion of its net income for such income-tax taxable year as is in excess of 15 per centum of the adjusted declared value."; and

(3) By repealing subsection (b) (relating to defense tax for five years).

(b) EFFECTIVE DATE.-This section shall be effective only with respect to income-tax taxable years ending after June 30, 1941.

TITLE IV-ESTATE AND GIFT TAXES

SEC. 401. ESTATE TAX RATES.

(a) RATES.-Section 935 (b) of the Internal Revenue Code is amended to read as follows:

"(b) The tentative tax referred to in subsection (a) (1) of this section shall be the tentative tax shown in the following table:

The tentative tax shall be:

3% of the net estate.

$150, plus 7% of excess over $5,000.
$500, plus 11% of excess over $10,000.
$1,600, plus 14% of excess over $20,000.
$3,000, plus 18% of excess over $30,000.
$4,800, plus 22% of excess over $40,000.
$7,000, plus 25% of excess over $50,000.
$9,500, plus 28% of excess over $60,000.
$20,700, plus 30% of excess
$100,000.
$65,700, plus 32% of excess over
$250,000.

over

$145,700, plus 35% of excess over $500,000.

$233,200, plus 37% of excess over $750,000.

$325,700, plus 39% of excess over $1,000,000.

but not over

$423,200, plus 42% of excess over $1,250,000.

$2,000,000.

$528,200, plus 45% of excess over $1,500,000.

Over $2,000,000

but not over

$2,500,000.

$753,200, plus 49% of excess over $2,000,000.

Over $2,500,000 but not

over

$3,000,000.

$998,200, plus 53% of excess over $2,500,000.

$1,263,200, plus 56% of excess over $3,000,000.

Over

$4,000,000.

$1,543,200, plus 59% of excess over $3,500,000.

(b) DEFENSE TAX REPEALED.-Subchapter C of Chapter 3 of the Internal Revenue Code is repealed.

(c) EFFECTIVE DATE.-Subsections (a) and (b) shall be effective only with respect to estates of decedents dying after the date of the enactment of this Act.

SEC. 402. GIFT TAX RATES.

(a) RATES.-The Rate Schedule of section 1001 of the Internal Revenue Code is amended to read as follows:

"If the net gifts are:

Not over $5,000‒‒‒‒‒

Over $5,000 but not over $10,000....
Over $10,000 but not over $20,000_
Over $20,000 but not over $30,000....

Over $30,000 but not over $40,000‒‒‒‒
Over $40,000 but not over $50,000———.
Over $50,000 but not over $60,000‒‒‒‒‒
Over $60,000 but not over $100,000‒‒‒
Over $100,000 but not over $250,000---
Over $250,000 but not over $500,000---
Over $500,000 but not over $750,000__-
Over $750,000 but not over $1,000,000_

Over $1,000,000 but
$1,250,000.
Over $1,250,000

not over

Over $1,500,000 but not over

54 Stat. 521.
26 U. S. C. § 951.

53 Stat. 144.
26 U. S. C. § 1001.

$244,275, plus 291% of excess over
$1,000,000.

but not

over

$1,500,000.

$317,400, plus 31% of excess over
$1,250,000.

$2,000,000.

$396,150, plus 333% of excess over
$1,500,000.

$564,900, plus 36% of excess over
$2,000,000.

$748,650, plus 391% of excess over
$2,500,000.

$947,400, plus 42% of excess over
$3,000,000.

$1,157,400, plus 441% of excess over
$3,500,000.

$1,378,650, plus 471% of excess over
$4,000,000.

$1,851,150, plus 501% of excess over
$5,000,000.

$7,000,000. Over $7,000,000

$2,353,650, plus 52% of excess over
$6,000,000.

$8,000,000. Over $8,000,000

$10,000,000. Over $10,000,000....

54 Stat. 521.

26 U. S. C. §1001 (d).

53 Stat. 420.

26 U.S. C. § 3452.

53 Stat. 421; 54 Stat.

522.

(b) YEARS TO WHICH AMENDMENTS APPLICABLE.-The amendments made by this section shall be applied in computing the tax for the calendar year 1942 and each calendar year thereafter (but not the tax for the calendar year 1941 or a previous calendar year), and such amendments shall be applied in all computations in respect of the calendar year 1941 and previous calendar years for the purpose of computing the tax for the calendar year 1942 and any calendar year thereafter.

(c) DEFENSE TAX REPEALED.-Section 1001 (d) of the Internal Revenue Code (relating to defense tax for five years on gifts) is repealed.

TITLE V-EXCISE TAXES

Part I-1932 Excise Taxes Made Permanent

SEC. 501. 1932 EXCISE TAXES MADE PERMANENT.

Section 3452 of the Internal Revenue Code (relating to expiration of 1932 excise taxes) is repealed.

SEC. 502. PIPE LINE TAX.

Section 3460 (a) of the Internal Revenue Code (relating to ter28 U.S. C. § 3460 (a). mination of tax on transportation by pipe line) is amended by striking out "originating before July 1, 1945".

53 Stat. 1b, 407, 409.

26 U. S. C., Subtitle C.

53 Stat. 425.

26 U. S. C. §3481 (b).

53 Stat. 425; 54 Stat.

522.

26 U.S. C. § 3482.

53 Stat. 190.
26 U. S. C. § 1700

(b) (1).

53 Stat. 190.

26 U. S. C. § 1700

(c) (1).

53 Stat. 195; 54 Stat.

522.

26 U. S. C. § § 1801.

SEC. 503. TECHNICAL AMENDMENT.

The heading of Subtitle C of the Internal Revenue Code is amended to read as follows:

"SUBTITLE C-MANUFACTURERS' EXCISE AND IMPORT TAXES AND TEMPORARY TAXES"

SEC. 504. BOND TAX.

Section 3481 (b) of the Internal Revenue Code (relating to expiration of tax on transfer of bonds) is repealed.

SEC. 505. CONVEYANCE TAX.

Section 3482 of the Internal Revenue Code (relating to tax on conveyances) is amended by striking out "delivered before July 1, 1945".

Part II-Defense Tax Rates Made Permanent (No Increase in
Tax and No Change in Basis of Tax)

SEC. 521. DEFENSE EXCISE TAX RATES MADE PERMANENT WHICH
ARE NOT INCREASED BY THIS ACT.

(a) The following sections of the Internal Revenue Code are amended as follows:

(1) BOX SEATS.-Section 1700 (b) (1) is amended by striking out "10 per centum" and inserting in lieu thereof "11 per centum". (2) SALES OUTSIDE BOX OFFICE.-Section 1700 (c) (1) is amended by striking out "10 per centum" and inserting in lieu thereof "11 per centum".

(3) CORPORATE SECURITIES.-Section 1801 is amended by striking out "10 cents until July 1, 1945, and 5 cents thereafter" and inserting in lieu thereof "11 cents".

(4) CAPITAL STOCK ISSUES.-Section 1802 (a) is amended by striking out "10 cents until July 1, 1945, and 5 cents thereafter" and the comma wherever following such expression and inserting in lieu thereof "11 cents"; and by striking out "2 cents until July 1, 1945, and 1 cent thereafter," and inserting in lieu thereof "3 cents".

(5) CAPITAL STOCK TRANSFERS.-Section 1802 (b) is amended by striking out "4 cents until July 1, 1945, and 2 cents thereafter," and inserting in lieu thereof "5 cents"; and by striking out "5 cents instead of 4 cents until July 1, 1945" and inserting in lieu thereof "6 cents".

(6) INSURANCE POLICIES.-Section 1804 is amended by striking out "3 cents" and inserting in lieu thereof "4 cents".

(7) PASSAGE TICKETS.-Section 1806 is amended by striking out "$1" and inserting in lieu thereof "$1.10"; by striking out "$3” and inserting in lieu thereof "$3.30"; and by striking out "$5” and inserting in lieu thereof “$5.50”.

53 Stat. 196; 54 Stat. 522.

26 U.S. C. §1802 (a).

53 Stat. 196; 54 Stat. 522.

26 U. S. C. § 1802 (b).

53 Stat. 197.
26 U. S. C. § 1804.

53 Stat. 199.
26 U. S. C. § 1806.

53 Stat. 219.
26 U. S. C. § 2000

(8) CIGARETTES.-Section 2000 (c) (2) is amended by striking out "$3" and inserting in lieu thereof "$3.25" and by striking out (c) (2). "$7.20" and inserting in lieu thereof "$7.80".

(9) PISTOLS AND REVOLVERS.-Section 2700 (a) is amended by striking out "10 per centum" and inserting in lieu thereof "11 per centum".

53 Stat. 288.
26 U.S. C. § 2700 (a).

53 Stat. 365.
26 U. S. C. §3150 (a).
53 Stat. 388.
26 U. 8. C. § 3250

(10) FERMENTED MALT LIQUORS.-Section 3150 (a) is amended by striking out "$5" and inserting in lieu thereof "$6". (11) WHOLESALERS OF LIQUOR.-Section 3250 (a) (1) is amended by striking out "$100" and inserting in lieu thereof (a) (1). "$110".

(12) RETAILERS OF LIQUOR.-Section 3250 (b) is amended by striking out "$25" and inserting in lieu thereof "$27.50".

(13) BREWERS.-Section 3250 (c) is amended by striking out "$100" and inserting in lieu thereof "$110" and by striking out "$50" and inserting in lieu thereof "$55".

(14) WHOLESALERS OF MALT LIQUORS.-Section 3250 (d) is amended by striking out "$50” and inserting in lieu thereof "$55".

(15) RETAILERS OF MALT LIQUORS.-Section 3250 (e) (1) is amended by striking out "$20" and inserting in lieu thereof "$22", and section 3250 (e) (3) is amended by striking out "$2" and inserting in lieu thereof "$2.20".

53 Stat. 388.
26 U. S. C. §3250 (b).

53 Stat. 388.

26 U.S. C. §3250 (c).

53 Stat. 388.

26 U.S. C. § 3250 (d).

53 Stat. 389.
26 U.S. C. §3250 (e).

53 Stat. 389.
26 U. S. C. § 3250

(16) RECTIFIERS.-Section 3250 (f) (1) is amended by striking out "$200" and inserting in lieu thereof "$220"; and by striking (1). out "$100" and inserting in lieu thereof "$110".

(17) STILLS.-Section 3250 (j) is amended by striking out "$50" and inserting in lieu thereof "$55"; and by striking out "$20" and inserting in lieu thereof "$22".

(18) FIREARMS, ETC.-Section 3407 is amended by striking out "10 per centum" and inserting in lieu thereof "11 per centum". (19) ELECTRICAL ENERGY.-Section 3411 is amended by striking out "3 per centum" and inserting in lieu thereof "313 per centum”. (20) GASOLINE.-Section 3412 (a) is amended by striking out "1 cent" and inserting in lieu thereof "1/2 cents".

(21) LUBRICATING OILS.-Section 3413 is amended by striking out "4 cents" and inserting in lieu thereof "42 cents".

(22) TRANSPORTATION OF OIL BY PIPE LINE.-Section 3460 (a) is amended by striking out "4 per centum" and inserting in lieu thereof "42 per centum".

(23) TRANSFER OF BONDS.-Section 3481 (a) is amended by striking out "4 cents" and inserting in lieu thereof "5 cents".

(24) CONVEYANCES.-Section 3482 is amended by striking out "50 cents" and inserting in lieu thereof "55 cents".

53 Stat. 390.
26 U.S. C. § 3250 (j).

53 Stat. 412.
26 U. S. C. § 3407.

53 Stat. 412.
26 U. S. C. § 3411.

53 Stat. 413.
26 U. S. C. §3412 (a).

53 Stat. 414.
26 U. S. C. § 3413.

53 Stat. 421; 54 Stat. 522. 26 U.S. C. §3460 (a).

53 Stat. 424.

26 U.S. C. § 3481 (a).

53 Stat. 425; 54 Stat. 522. 26 U. S. C. § 3482.