| Show 1 the T he excess profits law washington D C tan jan 21 through the failure of congress to recognize the depleting character of mining oil and gas properties in the excess profits tax act the mining and oil men of the united are urging a brief amendment to section of the act to remedy what they consider a very serious mistake mining and oil men from east cast and west have been in washington since congress assembled and they have succeeded in convincing members of the advisory board of the revenue 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 deductions which corporations are permitted to make are based upon capital stock instead of invested capital this provision of the law creates very serious inequalities of taxation between mine and oil wells which possess practically the same status of production for example two neighboring mining companies in a western state earn about each one of these possesses a capital stock of and the other the deduction of 9 per cent extinguishes the taxable income of the company and leaves it tax free under the law while the other company is entitled to a deduction of only from its earnings of the company possessing the large capital 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 possessing acres and producing about equal amounts of oil one is capitalized at and the other at the company of small capitalization must pay a burdensome tax while the other is exempt numerous instances of such inequalities have been brought to public attention the law provides for the deduction of not less than 7 per cent nor more than 9 per cent of the invested capital as a basis upon which the progressive assessment of excess profits is determined the higher the capitalization the greater the deduction so that the more conservative mining company with its low capitalization is required to pay a much higher tax upon its excess income the common interest in the problem mentioned has already welded together a great number of mining men into an effective organization which is operating cooperating co with the american mining congress to secure the attention of the treasury department and the national law makers repeated conferences have been held and the appointment of a committee of sixteen to advise with the commissioner of revenue has taken place this committee 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 burden among mineral producers possessing a similar status the committee of sixteen has suggested to the excess profits advisory committee an amendment to section of the war tax law this proposed amendment is based upon a recognition of a different principle of taxation necessary to the depleting assets of mining and oil corporations the advisory board seems to acknowledge that this class of corporations should have been especially considered in the drafting of the law and a differentiation of regulations provided the mining men assert that in numerous in stances the effect of the act is to invite mine operators to sacrifice time and capital for the sake of fulfilling their patriotic duty to the government in the production of raw materials te rials the committee of sixteen met last week with representatives of the treasury department at the headquarters of the american mining congress and the recommendations and proposed amendment were drafted after prolonged conference the mining men say that at a i time when the nation is in ex need of metals it is unwise to discourage their industries by the enforcement of inequitable legislation another point which has caused much concern is the ruling of the revenue commissioner that so called treasury stock sales as generally understood in the west are to be classed as income subject to the exceptional rates of taxation borne by other forms of income |
