United States : Shaheen, Udall Push to Eliminate Double Subsidies for Gold and Silver Mining Industry
Mar 13, 2019 (Euclid Infotech Ltd via COMTEX) —
As part of her ongoing efforts to end antiquated and unnecessary government programs, U.S. Senator Jeanne Shaheen (D-NH) introduced legislation with Senator Tom Udall (D-NM) that would end tax breaks for mining companies that are already mining public lands for free.
The Elimination of Double Subsidies for the Hardrock Mining Industry Act would protect taxpayers and reduce the federal deficit, and has earned the support of both taxpayer advocate and environmental groups. According to analysis from the nonpartisan Joint Committee on Taxation, the legislation would reduce the federal deficit by nearly $330 million over 10 years.
“Mining incentives made sense when the government was trying to lure companies to America’s untamed West 150 years ago,” said Shaheen. “But the mining industry has matured and those days are over. Now we must end these outdated and inefficient subsidies and instead focus on innovation in a 21st century economy.
It is time for mining companies to pay their fair share when they profit off of publicly owned resources like gold, silver, and copper mined on federal lands, said Udall. Current law contains a variety of giveaways, and in this case the tax code can end up forcing taxpayers to compensate mining companies for extracting highly valuable, publicly-owned minerals, instead of the other way around. Eliminating this duplicative tax break is one step toward restoring fairness, especially in light of the mess where taxpayers are stuck with the tab for abandoned mines that are poisoning our watersheds and threatening communities across the West.
As it stands now, the General Mining Law of 1872 allows hardrock mining companies – which mine for gold, silver, copper, and other precious metals – to mine on taxpayer-owned lands while paying nothing to the government, which significantly reduces their costs. In addition, the Percentage Depletion Allowance for mining on public lands gives U.S. mining companies the option of deducting a set percentage of their gross annual income from their federal income taxes, as an alternative to the standard corporate tax break for capital investment. The Shaheen-Udall Hardrock Mining Act would eliminate this special alternative tax break. Mining companies would still be able to claim deductions based on actual capital investment.
It is long past time to end the double subsidy for hardrock mining companies operating on federal lands. We thank Senators Shaheen and Udall for their efforts to eliminate this egregious giveaway, said Ms. Ryan Alexander, President, Taxpayers for Common Sense, a national nonpartisan budget watchdog. These companies already receive a massive subsidy under the 1872 Mining Law. This 147 year old anachronism gives away taxpayer gold, silver, and other precious minerals without a royalty.
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