Among the inequities of the World War II excess profits tax was the definition of "normal earnings" as the average profits for the years 1936-39. Anything over the average was taxable at a maximum rate of 90%. Many corporations complained that the base was unfair since they had been pouring money into expansion or new products during the '36-'39 period, thus their earnings were smaller than normal. For them, Congress left a loophole in the act: section 722. It provided for a rebate for corporations who could prove their 1936-39 average abnormally low.
Last week Du Pont reached through the loophole...
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