Kennedy was still proposing tax reform legislation, bills to close tax loopholes. "Loopholes! Those were THEIR loopholes he [Kennedy] was talking about!" In particular, there was the oil depletion allowance.
Although the Kennedy plan ostensibly kept the rate of the allowance at 27-1/2% the oilmen's attorneys, analyzing the measure, had concluded that changes proposed by the administration in the tax code would cut the effective rate to 17-1/2%.
To the rest of the world, such a reduction would be only justice--or at least the beginning of justice. To the oilmen, it was robbery.
The change--together with the elimination of some of the hundreds of hidden tax breaks for oil in the Internal Revenue Code--would cost them millions, perhaps billions of dollars a year.
If we are to have a strong America we must develop our great resources:
We must rebuild resource programs, pressing forward with forest development, water development, power development, soil conservation, and passing effective legislation to
control the pollution of our water and our air.
We must seek new breakthroughs in converting salt water into fresh, controlling weather, using atomic energy to increase our oil and mineral resources and developing new techniques of conservation.
We must recognize the increasing interdependence of all our resource needs by establishing a council of resource and conservation advisers to meet the needs of a growing population and an expanding economy.
We must use accounting methods which reflect the long-term return which investment in resource projects will yield, thus showing the true value of these projects, their real cost, and the nature of our investment in America's future.
Q: Oil men in Texas are seeking assurance from Senator Johnson that the oil depletion allowance will not be cut. Do you consider the 27.5% depletion allowance inequitable?
KENNEDY: There are about 104 commodities that have some kind of depletion
allowance--different kind of minerals, including oil. I believe all of those should be gone over in detail to make sure that no one is getting a tax break. That includes oil; it includes all kinds of minerals; it includes everything within the range of
taxation. It includes oil abroad. I have voted in the past to reduce the depletion allowance for the largest producers; for those from $5 million dollars down, to maintain it at 27.5%.
NIXON: Senator Kennedy's position and mine completely different on
this. I favor the present depletion allowance. I favor it not because I want to make a lot of oil men rich, but because I want to make America rich. This is the stimulation, the incentive for companies to go out and explore for oil, to develop it.