Yin on the Origins of the Percentage Depletion Allowance

George K. Yin, University of Virginia School of Law, has posted A Maritime Lawyer, the Percentage Depletion Allowance, and the Joint Committee on Taxation:

This year marks the 90th anniversary of both the percentage depletion allowance and the Joint Committee on Taxation. This essay relates the curious tale of Norman Beecher, a New York maritime lawyer with little background in energy, natural resources, or tax, who convinced Congress in 1918 to adopt a tax proposal that helped lead to both of these important features of the tax system eight years later. While Beecher’s idea ended up providing a major tax break for the oil and gas industry, this essay presents evidence that the source of the proposal was Beecher himself, and not the industry, as a result of his misunderstanding of the proposal’s tax effect. Since the conditions especially favorable to enactment of the proposal were very short-lived, this essay offers the intriguing possibility that but for Beecher (or his misunderstanding), the tax system might never have included percentage depletion or, conceivably, the Joint Committee.