11- While the new law eliminates the excess profits tax, in general the new rates result in an increase in tax. Although in the case of business enterprises which paid the maximum excess profits tax, the new rates effect a reduction of 1% to 2% in the effective tax rate, for those enterprises that did not pay excess profits tax, the ef-fective tax rate has been increased by approximately 4% or 5%, as can be seen from the following examples: Annual Tax Under 1964 Tax Rates Annual Tax Under Without Excess With Maximum Excess 1965 Tax Rates Profits Tax Profits Tax Annual Effective Effective Effectiv Income Tax Tax Rate Tax Tax Rate Tax Tax Rat US$ 4,000 US$ 484 12.09% US$ 2.26 10.65% US$ 783 19.59% 24,000 5,722 23.84% 4,769 19.87% 6,69227.88% 40,000 11,122 27.81% 9,269 23.17% 12,342 30.85% 80,000 26,026 32.53% 21,689 27.11% 27,520 34.40% 160,000 59,626 37.27% 49,909 31.19% 60,918 38.07% 240,000 93,226 38.84% 81,109 33.80% 96,998 40.42% 320,000 126,826 39.63% 112,309 35.10% 133,078 41.59% 400,000 160,426 40.11% 143,509 35.88% 169,158 42.29% As can be seen from the following table, for those enterprises that did not pay excess profits tax, the increase in tax reaches 20%, although the impact of the new rates decreases as income increases above US$80,000. For enterprises which paid the maximum excess profits tax, the reduction does not e ceed 15%, except at very low levels of income. Increase (Reduction) in Tax Without Excess With Maximum Excess Profits Tax Profits Tax-Annual Income Increase % (Reduction) _% US$ 4,000 US$ 58 13.52% US$ (299) (38.27%) 24,000 953 19.99% (970) (14.49%) 40,000 1, 853 20.00% (1,220) (9.88%) 80,000 4,337 20.00% (1,494) (5.43%) 160,000 9,717 19.47% (1,292) (2.12%) 240,000 12, 117 14.94% (3,772) (3.89%) 320,000 14,517 12.93% (6,252) (4.70%) 400,000 16,917 11.85% (8,732) (5.16%)