Surtax - United States

United States

Previous examples of a broadly-levied surtax in the United States include one imposed to help finance the Vietnam War during the Lyndon B. Johnson administration. It essentially consisted of calculating one's ordinary federal income tax liability and then adding another 10% to it—the amount of the surtax.

As the U.S. income tax system at that time was highly progressive, the surtax was much higher on those with higher incomes, as a 10% surtax imposed on a tax rate of 20% would result in an overall rate of 22%, while the same surtax imposed on a rate of 50% would result in an overall rate of 55%.

Some anti-war protesters refused to pay this tax, stating that while they were not anarchists and understood the need for and positive role played by government in many areas, they wanted none of their tax money going to a war that they felt was immoral. The surtax was repealed well before the war ended in Vietnam.

Surtaxes can be imposed on other taxes. They are usually imposed on the grounds of moral justification; they only affect persons who are already paying taxes rather than extending taxation to new areas or persons who are not previously being taxed.

A surtax of 4.3 percent was recently proposed on incomes over $500,000 by Congress to alleviate the alterations to the Alternative Minimum Tax code in the United States.

A surtax was proposed as part of the 2009-2010 health care reform in the United States.

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