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were members of Congress in 1942. See, e.g., United States v.
United Mine Workers, supra at 281-282.
Life insurance companies became subject to Federal income
tax when the Sixteenth Amendment to the United States
Constitution was ratified in 1913. Before that time, insurance
companies which were corporations were subject to an annual
excise tax of 1 percent of their net income over $5,000. See
Federal Corporation Excise Tax Act of 1909, ch. 6, sec. 38, 36
Stat. 112. Unlike other corporations, an insurance company's net
income included a deduction for the “net addition, if any,
required by law to be made within the year to reserve funds”.
Id. This deduction was the subject of much litigation by
casualty companies, and the judicial interpretations on the
breadth of that deduction were not always easily harmonized.
Compare McCoach v. Insurance Co. of North Am., 244 U.S. 585
(1917) (reserve against unpaid losses was not required by law),
with Maryland Cas. Co. v. United States, 251 U.S. 342 (1920)
(approving liability reserve for accrued indefinite liabilities
and loss claim reserve for other accrued losses).
After the Sixteenth Amendment was ratified, life insurance
companies continued to be taxed in the early years of our tax
system under the same general rules that applied to noninsurance
companies. Both types of companies were taxed on their gross
income, which, in the case of a life insurance company, consisted
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