#47 | Investments in Oil and Gas and Challenges Facing Small Businesses feat. Grant Norwood & Yoseph West

Practical Tax with Steve Moskowitz

Energy CEO Grant Norwood discusses investments in Oil and Gas, while Yoseph West talks with Steve about challenges facing small businesses. Episode Transcript Intro: Welcome to the Practical Tax podcast, with tax attorney Steve Moskowitz. The Practical Tax podcast is brought to you by Moskowitz, LLP, a tax law firm. Disclaimer: The information contained in this podcast is based upon information available as of date of recording and will not be updated for changes in law regulation. Any information is not to be considered tax advice or legal advice and does not form an attorney/client relationship. Further, this podcast may be construed as attorney advertising. You should see professional consultation for your individual tax and legal situation. Chip Franklin: Welcome to another edition of Practical Tax with tax attorney, Steve Moskowitz. Steve, you and I were just talking about energy and about electric cars and about the state of California then as we speak with the power grid being stretched to the max. So I thought it'd be an excellent time to bring in our first guest, Grant Norwood. Grant is CEO of Norwood Energy Corporation, which he'll tell us a little bit about that because that's down in Texas and he's nice enough to join us here. He also handles the day-to-day operations and evaluates oil and gas prospects and minerals. It's a lot. Steve Moskowitz: Good old Texas, with no state income taxes. Grant Norwood: We love it. Steve Moskowitz: I know. It's a bit different here in California with such high income taxes. And so many people in California are moving to your state. Grant Norwood: That's true. If you moved over here you'd probably have an easier job. Steve Moskowitz: Probably would, but people everywhere need me. Grant Norwood: That's true. That's true. Chip Franklin: That's true. That's a racket that Congress set up with taxes. What was the 16th Amendment with taxes? What year was that, Steve? Steve Moskowitz: Taxes became effect in 1913 and I was not in law practice in 1913. I just want that to be clear. And when the income taxes came in, it came in as a tax on the wealthy. The top tax rate was 6%. And do you know how much income you had to be making in 1913 dollars to hit that top 6% bracket? Half a million bucks. Chip Franklin: Wow. Steve Moskowitz: In 1913. Do you know how much money half a million dollars was in our dollars in 1913? That's how our income taxes started out. And that's what happens when the government starts off with just a little tax that'll only affect a few people. And look what it is today. Chip Franklin: There was a panic of 1913, too. Wasn't that a run on banks? There was a difficult time, right? Steve Moskowitz: There have been all kinds of challenges. But again, I'm focusing on the tax. And there there's so many taxes that governments start off with, "Oh, let's vote it in. It's not going to affect you." For example, politicians saying, "Oh, we're going to put this tax on corporations but it won't affect you." Well, of course it will, because corporations say, "Okay, my costs are up, therefore I'll just charge more and consumers pay it." So that's why when people think about a tax, they should think, "Well, wait a minute, this could really affect you. What's the government doing with the money?" And that's one of the many reasons I became a tax attorney. Chip Franklin: Speaking of which, taxes in the state of California on gas, this is your belly whip, Grant, make it so much more expensive here to purchase fuel than it does in other states. Well, let's talk about where the price of crude and gas is right now for Americans. It seems to be going down since the last time we talked to you appreciably, especially in the last six weeks. Where are we headed, and how long will it take to get wherever that is? Grant Norwood: Well, we have seen the prices fall back just a little bit.