Word: excessives
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...aroused Congress will change oil-company taxes this year. The only question is by how much. Except for an excess-profits tax, most of the proposals before Congress would do little to increase the tax liabilities of international oil companies. President Nixon has proposed that Congress repeal the U.S. depletion allowance for oil wells located abroad. The companies, however, generate such huge tax write-offs from other sources-mainly the foreign-tax credit -that they rarely need to use the foreign depletion allowance. More important it is likely that the domestic depletion allowance will be abolished or substantially reduced...
...Congressmen who are urging an excess-profits tax on the oil industry are making a proposal that is more innovative than they may realize. Major excess-profits taxes have been clamped on U.S. business three times since 1917, but in every case the tax was levied on almost all corporations in order to help pay for a war. Never before has the nation debated imposing an excess-profits tax on a single industry in peacetime...
...Previous excess-profits taxes have been justified partly as a way to raise vast amounts of money quickly. Now, practically nobody bothers to talk much about how many dollars an excess-profits tax might collect. Instead, the controversy turns on issues of fairness and effectiveness...
...very nature, an excess-profits tax is highly complicated. Many economists contend that there is no such thing as "excess" profit because in a free economy a corporation is supposed to earn the highest profit it can. Alan Greenspan, a member of TIME'S Board of Economists and adviser to the Nixon Administration, contends that people who favor the tax are unconsciously adopting a Marxist view that profit is basically exploitation...
...answering philosophical argument has been that profits can be considered "excess" if they result not from a corporation's efficiency or inventiveness but from outside circumstances that remove the normal checks of the market and allow profit at the expense of the public. Historically, that argument has been given a moralistic cast by war: it seemed wrong for a company to earn outsized profits out of a situation that imposed suffering on many citizens...