Tulsa daily world. [volume] (Tulsa, Indian Territory [Okla.]) 1905-1919, 1917-11-26

! for tho year 1917 some qualified ac-
couutant familiar with all the provl-
| sinrs OF .he laws and particularly in
reference 70 the making Of returns,
/ e employed: that such person nave AN
office In the city OF Tulsa ana that II 8
services he available to all ncmb -
/ Of the association; that all members
I NJ the association in making their
returns when In doubt anl when
dispute a !ses with the treasury de-
purtmCnt, present the matter TO such
accountant in order that uniform
/ practice he adopted and ahered TO.
We further suggest for the consid-
/ GRAFTON of the executive committee and
/ the association as whole the follow
ing general propositions which have
/ been advanced and laid before us. and
which in brief account for the present
discriminatory application OF the law,
/ ca The oil and gas business has
always been Disseminated against by
the income tax laws Of the United
States because In substance SUCH taxes
/ have been charged for the privilege of
/ depicting capital, and while the indus
try has acQuicsccd in former laws be-
. cause the rates were not so extremely
high as to result in confiscation the
time has come when under present
F rates which may be materially in
burdened to such an extent as TO So
riously interfere with future develop
. mcut. and which in many Instances
amount almost to confiscation.
Cbl That there ~ no other industry
comparable to that Of oil ana Sds. 1T
the case Of timber and other minerals
the extent of the deposit or the prop
erty rs certain. It's production and re-
muval can be regulated. Such Other
"a n "A ha
removal and marketing Of the same II
no ease becomes necessary as In the
case OF oil and gas in order to protect
the deposit.
(c) That there is an economic rea
son why The expenditure Of uomi
nal amount IN the form of bonus fol
a tract of land plus comparatively
nominal Investment for the drilling o
a well creates a valve apparently dis
proportionate to that nominal invest
meut The rewards mus, be great il
exceptional successful instances in or
der to offset the predominant genera
losses IN the business. II oil were as
sured in every well drilled, leases an,
the product itself. would he of nomina
value. In that case "A fair rate of return
on the capital involved would meet tn,
demands OF economic law. Therefor
the reason for these rapid ana grca
enhancemcnts finds basis in the gen
erdl amounts lost in the business. Th
successful lease represents not only II
b intrinsic value but all the losses whicl
have gone into the business as well
Frequently an individual operator Il
. given year has spent a large amour
Of money unsuCcessfully. In the mex
d year he Is successful. Ills deduction
g are coHfined to prior years which h
! had no income and under the presen
r. laws he is compelled to give back
l large part Of his capital to the govern
ment, as represented by isolated sue
, ccssful ventures.
tdl II is further suggested that i
Invested capital" as now defined d
existing laws were synonymous wit
the value of the property regardless q
/, the amount any particular lease ha
actually cost (hecause in substance
does represent. considering the bust
ness In its entirely and the operation
OF the individual operator in their en-
tirety the amount II can be sold for
that the rolef required by the indus
uy would be in a large measure at
fordcd
te) That under the present pro
visions of the laws no depletion ca
be charged over and above the nomi
nal amount invested for the lease II
self. Here again II invested Capita
were synonymous with the actua
value, depletion could be taken.
60 That existing laws arbitraril
n classify a producing oil and gas min
ing lease (Which probably represent
II years OF toll and the Investment G
much money In unsuccessful ven
\enturesl, with gifts, that is, If toda
an individual receives "A bushes
=, building as "a gift, he is not charge
~ will the value thereof as income. o
y the contrary, income received fror
\, that building is the only tax in. pose
n upon him as a result OF that transSa c
ton. In addition thereto he is er
titled to charge actual depreciation
., So that at the end of a given tim
4. tc has taken by way OF deductions tn
s actual value of the gift and has tn
equivalent intact Whereas, in tn
II case OF an oil property requiring onl
" a nominal Investment, the govern
k ment has taken it's share of the de
, pleted capital during those years {
- N Eh taxation to the direct consider
y able financial loss of the owne
l. Therefore. prior investment, industr,
4 thrift. enterprise and application al
- penalized while the person who merel
y as the result of good fortune has rt
4 ceived some valuable thing is full
protected and assured complete an
80 comprehensive return of income an
depreciation.
tg.) That the discrimination pointe
out has extreme application in respe'
TO leases making large flush produ,
ton in the year 1917, which lease
represent only a nominal investmer
and which constitute the major sourc
Of income in the given case; hut
careful survey and consideration {
the law shows that there is a bas
discrimination applicable TO the eI
tire industry regardless of the amour
invested because of the disproportior
e ate amount OF production during III
e flush producing period of the leas
II and further, because proper arrange
l. ments have not been made for deplC
e ton during the period of flush pre-
Y duction.
: (h) That the oil and gas busine,
= REQUIRES the steady and constant r,
| Iipyaet,n ont of lat.xa amOuntS OF on Dit,