Saint Reagan vs the Wildcats and Oil Barons

Now would have ever guessed that Ronald Reagan would say this in an address to the nation:

"Under our new tax proposal the oil and gas industry will be asked to pick up a larger share of the national tax burden. The old oil depletion allowance will be dropped from the tax code except for wells producing less than 10 barrels a day. By eliminating this special preference, we'll go a long way toward ensuring that those that earn their wealth in the oil industry will be subject to the same taxes as the rest of us. This is only fair. To continue our drive for energy independence, the current treatment of the costs of exploring and drilling for new oil will be maintained."

- Ronald Reagan, May 28th 1985

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The oil depletion allowance is a tax gimmick instituted in 1926 that allows well owners to deduct a fraction of their revenues rather than their actual costs. Of course, they can chose to do the latter if it works out better, so effectively this becomes a tax cut relative to standard accounting...in many cases a very large one. There is no reason to grant a sweetheart deal to the world's most profitable industry. Reagan was right, and this tax break should be eliminated.