Income, Excess Profits, and Estate Taxes (Paperback)

This historic book may have numerous typos and missing text. Purchasers can usually download a free scanned copy of the original book (without typos) from the publisher. Not indexed. Not illustrated. 1918 edition. Excerpt: ... Mr. Kellev. That, again, is dependent on the field. The Chairman. Would you say it would be three years or a good' deal more? Mr. Kelley. I should say it would he more than that. The Chairman. A committee of oil men told me it was three years. Mr. Kelley. That may have been true of their particular localities. The Chairman. They represented oil wells in Oklahoma and Illinois, as well as other States. I just wanted to get your best judgment. Mr. Kelley. I was just speaking of the general average. The Chairman. But there is really no way you can get at the general average, is there? Mr. Kellky. Xo, there is not: although after a field has been proven and in operation for a considerable number of years you can then approximate it, and you can come near enough, perhaps, to do substantial justice for tax purposes in computing depletion, but it is a very difficult situation to compute depletion properly so that the Government will get sufficient revenue and at the same time the producer have a reasonable allowance. The Chairman. The real question is the allowance to be granted? Mr. Kelley. Yes, sir. We feel that under present conditions there is no allowance, because, again, we are in this situation: The oil producer must take the greater part of his earnings every year and put them back into the ground, because as his old wells decline he must drill new wells in order, to keep his production stationary. Now. there comes a point after he gets his property pretty well drilled up, that in spite of everything he does he can not keep his production stationary, and it is going to continue to go down. It is not like a steel mill. If you take the greater part of your profits and reinvest them in your steel mill, at the end of 15 years you probably...