REDUCTION OF TAX ON CORPORATIONS.

SEC. 121. REDUCTION OF TAX ON CORPORATIONS. Section 11 (relating to tax on corporations) is amended to read as follows: “SEC. 11. TAX IMPOSED. “(a) Corporations in General.—A tax is hereby imposed for each taxable year on the taxable income of every corporation. The tax shall consist, of a normal tax computed under subsection (b) and a surtax computed under subsection (c). “(b) Normal Tax.—The normal tax is equal to the following percentage of the taxable income: “(1) 30 percent, in the case of a taxable year beginning before January 1, 1964, and “(2) 22 percent, in the case of a taxable year beginning after December 31, 1963. “(c) Surtax.—The surtax is equal to the following percentage of the amount by which the taxable income exceeds the surtax exemption for the taxable year: “(1) 22 percent, in the case of a taxable year beginning before January 1, 1964, “(2) 28 percent, in the case of a taxable year beginning after December 31, 1963, and before January 1, 1965, and “(3) 26 percent, in the case of a taxable year beginning after December 31, 1964. “(d) Surtax Exemption.—For purposes of this subtitle, the surtax exemption for any taxable year is $25,000, except that, with respect to a corporation to which section 1561 (relating to surtax exemptions in case of certain controlled corporations) applies for the taxable year, the surtax exemption for the taxable year is the amount determined under such section. “(e) Exceptions.—Subsection (a) shall not apply to a corporation subject to a tax imposed by— “(1) section 594 (relating to mutual savings banks conducting life insurance business), “(2) subchapter L (sec. 801 and following, relating to insurance companies), “(3) subchapter M (sec. 851 and following, relating to regulated investment companies and real estate investment trusts), or “(4) section 881(a) (relating to foreign corporations not engaged in business in United States).”