The Goldfield news and weekly tribune. [volume] (Goldfield, Nev.) 1911-1947, 1918-01-05
RAISE OBJECTIONS
TO PROFITS
TAX LAW
MINING AND OIL COMPANIES
FIND INJUSTICE IN
MEASURE

Nv Va ~
recognize the depicting character
of mining, oil and gas properties
In the excess profits tax act, the
mining and oil men of the United
States are urging a brief amend
ment to Section 207 of the act to
remedy what they consider a very
serious mistake.
Mining and oil men from east and
west have been in Washington since
ongress assembled and they have
succeeded in convincing members
of the advisory board of the W
nue. commissioner that an oversight
occurred in the framing of the law.
One of the serious blunders of
the revenue tax act, according to
the mine operators, is that the de-
auctions which corporations are per-
mitted to make are based upon cap
ital stock instead of invested capt.
tai. This provision of the law ere
ates very serious inequalities OF tax
alton between mine and oil wells
which possess practically the same
status of production.
For example, two neighboring
mining companies in a western state
earning about ~$1,500,O00 each. One
of these possesses a capital stock of
SIS, 900 and the other $780,
900. The deduction of nine per
cent extinguishes the taxable income
of the $1S,000,0 00 company and
leaves it tax-free under the law,
while the other company is entitled
to a deduction of only $22,500 from
it's earning of $1,50O,OOO. The
company possessing the large CAPT.
tai is entirely willing to submit to
a tax burden equal to that of its
neighbor, and is assisting in the
work of changing the law.
In the case of two contiguous oil
companies in Oklahoma, each pos
sessing 160 acres and producing
about equal amounts of oil, one is
capitalized at $4,000 and the
other at $5O,O00,0 coo. The company
of small capitalization must pay a
burdensome tax, while the other is
exempt.
Numerous instances of such in
equalities have been brought to
public attention.
The law provides for the deduc-
ton of not less than per cent
nor more than 9 per cent of the in
vested capital as a basis upon which
the progressive assessment OF ex-
cess profits is determined. The
higher the capitalization, the great
er the deduction, so that the more
conservative mining company with
it's low capitalization is required to
pay a much higher tax upon it's
excess income.
The common interest in the prob
lem mentioned has already welded
together a great number of mining
men into an effective organization
which is cooperating with the
American mining congress to secure
the attention of the treasury de-
partment and the national law
makers. Repeated conferences have
been held and the appointment of
a committee of 16 to advise with
the commissioners of revenue has
taken place. This comittee was
created in response to a resolution
asking each of the various branches
of the ''exhausting'' industries to
appoint two members.
The objections raised by the
mining and oil men do not indicate
any desire to evade taxation, but
rather a wish to ~equalize the bur-
den among mineral producers poss-
essing a similar status.
The committee of sixteen has sug-
gested to the excess profits advisory
committee an amendment to Sec
ton 207 of the war tax law. This
proposed amendment is based upon
a recognition of a different princi-
pie of taxation necessary to the de-
pleting assets of mining and oil
corporations.
The advisory board seems to &C
knowledge that this class of cor
porations should have been especial
ly considered in the drafting of the
law and a differentiation of regu-
lations provided. The mining men
assert that in numerous instances
the effect of the act Is to invite
mine operators to sacrifice time and
capital for the sake of fulfilling
their patriotic dutyf to the govern