Tulsa daily world. [volume] (Tulsa, Indian Territory [Okla.]) 1905-1919, 1917-11-25
E. L. ArOnSOn Discusses
Federal Tax Legislation

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90 were they aware Of the fact that
they would be subject 90 a large tax,
end certainly not at tho prices they
accepted.
The oil industry Is different from
any other. Many of those transfers
showed on the face exceptional profits
~ dcilars and cents on the particular
y leal over the original dollars ar
c"rts cost at the time of tho pur-
chase. tho as n matter OF fact dollars
end cents played the least important
factor in determining the clement OF
urrr' af any r.-.'.u'as d.al Tho
oil irdrstiy is largely spccrl1tivo .
is such that number Of deals are
made with loss. while the exceptional
one alona rs made AZ real profit
The oil industry IS srbicct t. such
vic'gsitudes ana possibilities for losses
that tie profits, when they do occur,
must be of exceptional MAGNITUDE.
I:ut the statute simply considers th"
particular deal on It's own merits. and
an undue burden Is thereby placed
on the oil man. Especially is this
the case whore sales have been made
before tho enactment OF these laws
and in most cases before the law was
even thought of.
would. therefore, suggest in this
connection tina. when congress goes
into session ami takes mp the pues-
tions regarding these tax laws, that
an amendment should be offered TO
Congress providing that the law
siiUpld take effect on it's passage.
which is October I, instead of Jan
uary /. 1917.
?. In reference Ia the exclusion of
carried surplus and limitation of nor
nal profits To " per cent.
TThe original intention OF the eN-
cess profit tax was that those VINO
made an undue prCfit IN the time OF
war snould he obliged to share this
profit with the government. They
have arbitrarily determined that the
normql profits allowed to all indus,
tries should he between I and
o Der cent Of the amount Of the
investment as Il appeared on this
books of that company or individual
on January /. 1tl7 This has several
faults. Aside from rs rctroactiV"
character. the law excludes the sur
plug earned and used In the business
during the year 1917 an figuring the
inventory. II is true that the law pro
Nides that invested capital is in
vested for the year averaged monthly.
but rcvcrses itself by saying "eNclu-
sive Ot profits earned during the tax
able year" As a matter OF fact, ouch
surplus was added 60 the assets of
January |, 1917, and used rs part OF
the capital invested to earn the prof
its taxed. Therefore that surplus
should be included IN determining the
monthly average of invested capita.
i'm arriving at the percentage of proflt.
believe the law should he made
clear that where the undivided profits
or surplus have been pat into the
business tney may he added to the
original capital to determine the IN
vested capital.
The law has failed of its purpose
I'm cnlctiug an excess profit tax law
i'm which the maximum profit is
limited to per cent. Now, while
9 per cent on n large capitalization
OF banking business, or large mer-
camille enterprise, Is liberal income,
and is on a line with their pre-war
profits. to the oil man it. is by no
means adequate, for the reason that
the prc-war profits generally earned
in the oil business was considered
normal at between - and S3 l-3 per
cent OF the investment Properties
were bought and sold on tho presump-
ton that they would pay out in three
or four years.
Tho income from the oil business Is
different from any other line, for the