Word: write-off
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When Defense Mobilizer Gordon Gray granted Idaho Power Co. a fast tax write-off on two Snake River dams (TIME, May 13), he handed public powermen and the Democrats a political grenade. Last week Democratic Senator Estes Kefauver's antitrust and monopoly subcommittee pulled...
After Gray claimed executive privilege, refusing to say whether the White House influenced him in giving Idaho Power what amounts to an interest-free loan for five years, Interior Secretary Fred Seaton testified. He said that he had been against the write-off from the start, that Idaho Power did not need the tax break. While Seaton conceded that Gray's action was legally correct, "I reiterate that I did recommend against issuance of the certificates and would do so again...
...write-off was hardly a "political theft" since 913 power projects, including some in Byrd's own state, have received similar tax breaks in the past seven years. Furthermore, while the company will save in taxes in the dam's less profitable early years, its depreciation deductions will later shrink just when its profits rise, and eventually it will pay the tax saving back...
...timing of the announcement was a political blunder by the Eisenhower Administration that was bound to hurt the cause of private power in the Northwest. Idaho Power had applied for the write-off four years ago, was still eligible under an ODM Korean war expansion goal, even though the program was closed out at the end of 1955. Knowing that the company's application was still on file, Virginia's Democratic Senator A. Willis Robertson, chairman of the Joint Defense Production Committee, had asked ODM not to grant the write-off until the committee investigated. In granting...
...gave public powermen a new issue. They pointed to the case of the Northwest's Washington Water Power Co., which got a fast tax write-off on its Cabinet Gorge dam project. The company told stockholders that 71% of their most recent dividend was due to fast amortization, could be reported as a capital gain...