George Bush: The Unauthorized Biography

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thanks to this provision. Truman claimed that he wanted to cut the depletion allowance to 15%, but


Congressmen opposcarry out this pledge. Senators of the stripe of Humphrey, Douglas, Williams of Delaware and othered to the high depletion allowance later claimed that he had done very little to (^)
offered amendments to reduce the depletion allowance to 15%, or to restrict the 27.5% to oil
producers with incomes below a certain level, but these efforts were defeated in 1951, 1954, 1958,
1962, 1964, and 1967. But in 1969 the issue was back in the form of a clamor for tax reform as the
economy deteriorated, and a great deal of publoil cartel. ic heat was focussed on the 27.5% for Rockefeller's
Congressman Charles Vanick of Ohio, who was profiling himself as a leading tax reformer,
calculated that the oil depletion allowance had resulted in the loss of over $140 billion in tax
revenues since the time it was instituted.
In response to this public hue and cry against the 27.5%, the public relations men of the oil cartel
devised an elaborate public charade, with the depletion allowance to be cut slightly in order to turn
off the public pressure and save the bulk of the write-off. In May of 1969 chairman Mills said that
the 27.5% was a "symbolic" figure and could be slightly trimmed.
In July, the Ways and Means Committe reported out a measure to cut the depletion allowance to
20%. Congressman Vanick was happy to have something to show for his efforts: "We've really got
a reform bill now," he told the press. Bush was going along with the 20%, but defended the
principle of a substantial depletion allowance. According to Bush, "unreproven that a tax incentive was necessary for oil and gas exploration "duefuted" expert testimony had to the serious gas reserve
shortages in this country." "Depletion," said Bush, "has become a symbol to some people and
without examining the reasons for its existence or its fundamental importance to this country, some
want to slug away at it." [fn 18]
On August 28, 1969 Congressman George Bush and Texas Senator John Tower flew to San
Clemente to meet with President Nixon on this issue. Nixon had said during the 1968 campaign that
he favored the 27.5% allowance, but he was willing to play ball with the oil cartel. Nixon, Bush and
Tower were joined in San Clemente by Treasury Secretary David Kennedy, who was preparing to
testify on oiNixon that the oil cartel was willing to accept some reduction of the depletion allowance, and thatl taxes before the Russell Long's Senate Finance Committee. Tower and Bush instructed
the Administration should merely state that it was willing to accept whatever the Congress
approved. According to one historian of the oil industry, "This was the first step in preparation for
the 'sting.' But there was one slight stumble before the con men got their signals worked out
perfectly." [fn 19]
Kennedy got confused by the 20% figure that had been bandied about in the public debate. He told
the Senate that while Nixon would prefer to keep the 27.5% figure, he was also willing to come
down to 20%. This was more than the token concession that the oil cartel had been prepared to
make. On October 7 the House passed the 20% figure by a vote of 394 tthe cut. This entailed very little risk, since Senator Russell Long of the Senate Finance Committee,o 30, with Bush voting for (^)
himself an oil producer through his participation in the Long family Win or Lose Corporation, was
unwilling to reduce the depletion allowance below 23%. Nixon's deputy White House counsel
Harry S. Dent wrote a letter to a county judge in Midland, Texas, of all places, which stated that
Treasury Secretary Kennedy had been in error about Nixon seeing two alternatives, 27.5% or 20%,and that "the President will abide by the judgment of Congress." An aide of Senator Proxmire
complained: "If the committee cuts back the depletion allowance by a modest amount--say to 23%--
it may represent a low enough profile that Senate liberals will have a more difficult time cutting it
further." The 23% figure was the one that was ultimately accepted, and the reduction in the
depletion allowance thus accomplished was calculated to have increased the tax bill of the domestic

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