ustxtxb_obs_1975_04_11_50_00019-00000_000.pdf

the independents’ role in finding new oil and pressures on them to sell out to the majors. Hollings and Sen. Edward Kennedy pointed out that Sen. Russell Long of Louisiana had been quoted back home that the Wilson amendment would have passed had it been limited to, in effect, 300 barrels a day instead of 3,000. Hollings pointed out that independents are making 26 percent a year on equity, compared to the majors’ 20 percent. Kennedy and Hollings both pointed out that their plan, exempting independents producing 1,000 barrels a day or less, covered 97 percent of the independents. Bentsen made his statement against depletion for the majors casually on March 18. “I am opposed to depletion for the majors,” he said. “I am willing to limit the foreign tax write-off and change the accounting practices of the majors, which I think have allowed them to do some of the financing of some of their foreign production at the , expense of the U.S. taxpayer.” But the independent, while not a poor person, had to be a viable competitor able to bear a $1 million loss on a well, so Bentsen favored keeping depletion for him. Bentsen also wanted depletion retained for smaller producers of natural gas, which gave rise to a charge that he was proposing a “double depletion” exemption. He required the depletion benefit to be plowed back into production and precluded its going to those retailing oil. His proposal reduced the tax “take” from repeal half a billion dollars, from $2 billion to $1.5 billion a year. Bentsen’s amendment in an initial parliamentary situation had support from presidential prospect Frank Church of Idaho and passed, 47-41. It was opposed by the other presidential prospects, Bayh, Jackson, Humphrey, and Kennedy, and by Mondale and McGovern. Kennedy drew the line between little independents, for whom he said “crocodile tears” were being shed, and big independents, who he said were eating up little independents, but were protected by the Bentsen amendment. The independents, he also said, “are some of the juiciest tax shelters for rich income people in this country.” He quoted a form letter sent out by the Big D Oil & Gas Co. of Dallas, Tex., to doctors: “DEAR DOCTOR: “No doubt you make more than $40,000 a year. That’s why you should take a minute and read this. “No doubt you are paying a substantial amount of income .tax $$$$ that are gone forever. Few tax havens are left for you!!!! One tax haven that has withstood the wrath of the Federal Government is in the oil and gas industry.” SENATOR Humphrey also got in slams at Bentsen’s exemption. Bentsen’s approach, Humphrey said, retained depletion for a company that could easily gross $10 to $15 million a year. “This high cutoff level would include virtually all oil producers except the major integrated companies,” Humphrey said. “Many of these so-called independents really are oil men with incomes much larger than those of the highest officials of Exxon or Mobil . . . . These large operators have no need of further government subsidy.” Hollings explained that those trying to limit the exemption to 1,000 barrels a day “want to make sure that the majors do not go into that so-called 3,000. With a 3,000-barrel exemption all they have to do is take five or six $11 million operations and that is $55 million . . . a year operation in drilling.” Evidently the forces for the 1,000-level were strong, because Bentsen voted for a compromise of 2,000 barrels \(and the first Church, Humphrey, Jackson, Kennedy, McGovern, and Mondale opposed it, but it was adopted, 47-46. Senator John Tower of Texas was one of the 12 senators who voted no as repeal of depletion except for independents passed the Senate, 82-12. Gov . Dolph Briscoe called repeal “a terrible mistake.” In the conference committee, the 2,000-barrel exemption was approved until 1979, after which the level will be 1,000. Between 1979 and 1984 the 22 percent rate will be dropped in phases to 15 percent. But the conferees raised the amount the allowance can provide from 50 percent to 65 percent of the producers’ income. In this form, the depletion phase-down became law when President Ford signed the tax bill March 29. As enacted, the law provides a 10 percent income tax rebate to a maximum of $200 in 1974, a $30 income tax credit for each personal tax exemption for 1975, a $50 one-time bonus payment for social security recipients, and an income tax credit for buying a new house. Fifteen Texas members of the House voted against this final bill, and eight voted aye. The 15 opponents of the tax-cut bill of 1975: Republicans Alan Steelman, Jim Collins, and Bill Archer; Democrats Dale Milford, Olin Teague, Omar Burleson, Bob Casey, Henry Gonzalez, Abraham Kazen, Bob Krueger, George Mahon, Bob Poage, Ray Roberts, Wilson, and John Young. . The eight supporters of the legislation: Democrats Jack Brooks, Kika de la Garza, Eckhardt, Barbara Jordan, Wright Patman, Jake Pickle, Richard White, and Jim Wright. R. D. 1 high school in Oregon = $6.25 million = paid by 1 Oregon county to support military. Unfunded program to upgrade rural American life = $300 million = 5 C-5A aircraft. National solid-waste treatment program = $43.5 billion = B-1 bomber program. from The Permanent War Economy, Seymour Melman. April 11, 1975 19 Bob and Sara Roebuck Anchor National Financial Services 1524 E. Anderson Lane, Austin bonds stocks insurance mutual funds optional retirement program THE TEXAS OBSERVER “A tradition of honesty, accuracy, fairness, and tireless investigation has enabled the Texas Observer to occupy a unique place in Texas journalism.” The Adversaries: Politics and The “The always impious Texas Observer … We recommend it.” I. F. 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