In addition, the law shifted the corporate tax structure from a flat rate to a graduated one, increasing the tax on the highest corporate incomes. It also implemented a tax on undistributed corporate profits, targeting companies that withheld dividends from shareholders. /4
The law faced strong opposition from wealthy businessmen and conservatives, who denounced President Roosevelt as a “traitor to his class.” Opponents also called it an attack on success and accused Roosevelt of promoting class warfare by pitting the poor against the rich for political gain. /5
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While many wealthy critics said the law as socialistic and destructive to investment, its main weakness was that it was easily sidestepped. Congress responded with the Revenue Act of 1937, which closed some of the most common loopholes and addressed widespread tax evasion. /end
