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Finance Dictionary and Glossary of Investment Terms
accumulated earnings tax
Definition 1.
An additional tax on earnings that a business retains in an attempt to avoid the higher income taxes the owners would be subject to if the earnings were paid out to them as dividends. also called accumulated profits tax.
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Definition 2.
A tax imposed by the federal government upon companies with retained earnings deemed to be unreasonable and in excess of what is considered ordinary.
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