Mining’s second assertion begs the questionoif whether the deductions properly reflect the cost of getting the ore out of the earth. Many of the deductions are highly questionable. The deductions include oddities like fire insurance and marketing costs (about $80-90 million), aspects specifically questioned by legislators during yesterday's hearing.
Could this bill result in a lawsuit? Sure, any bill can. Would mining be successful in such an endeavor? Highly doubtful, considering many of the deductions have been added year after year, and many of which are not considered deductions for many other industries (aka "the cost of doing business" which is not deductible). Furthermore, such a lawsuit may motivate the state to find other ways to get payback via additional tax methods.
My solution to all these problems would be to introduce a bill that taxes the extraction of minerals. You wouldn’t be taxing proceeds, but rather taxing the process of extracting anything from the ground. Again, environmental concerns are a justification for such a tax.
Bottom line: in comparison to anywhere else in the world, Nevada mining companies are paying pennies, and Nevadans are getting the shaft. We have an education system and essential services to fund. The Legislature should do what it takes instead of coddling to wealthy lobbies.
Article comments
1 - Cannonshop
I'm always amused when someone makes the claim that the people who make their money for them can't, or won't, leave if treated badly.
Always.
Industries can, and WILL leave, even mining can and will leave, if the business environment reaches a point where the move costs less than the externalities imposed.
Just Ask Detroit.
2 - Justin McAffee
Oh, I agree that you can't take things to far with taxes, or else businesses will leave. The better comparison is California. Nevada gets lots of business from them. The reason Detroit is not a great example is because the auto industry took manufacturing outside the United States because corporations love to use slave labor when possible.
You have to be willing to draw distinctions though.
Wyoming produced less mining but brought in over 2 billion in revenue for the state. Mining hasn't and wont leave there. Nevada brought in a lousy 48 million in tax revenues from mining. Don't tell me that Nevada doesn't have room to wiggle.
And what about the teachers and students (educated workforce) that will leave if we treat them poorly by massive cuts?
3 - Cannonshop
Have you accounted for the actual market price of the materials being mined, Justin? That has a hell of a lot more to do with whether the industry stays, or goes-as long as the price per tonne can soak the added cost on the open market.
And Detroit is a PERFECT example-the auto industry got into a situation where they were dealing with a domestic monopoly on labor in their industry (UAW contracts with Ford look like UAW contracts at Chrysler looks like UAW contracts at GM), plus punitive externalities on their industry in the area (nobody is going to invest in Michigan for well-paying heavy industries, there's a reason-it's not JUST the unions, it's also the government there. a good business climate can ignore or benefit from the presence of strong labor unions, but when the rest of the business environment turns hostile, the companies are going to up-root and un-ass for less hostile places.)
4 - Cannonshop
The West when I was growing up (aside from the Coasts, which we moved to later) is covered in mines that aren't played out, in that the veins of ore are there, rich, and relatively easy to access-but the cost of operation is too high to make keeping it open profitable enough to keep it open-that's Mining. Your product in mining is a commodity, and if the market is saturated with that commodity, or if your local production cost due to either internal, or external factors, is higher than it will cost your customers to have it shipped from, say, south africa, you don't stay in business at that location-no matter HOW rich the vein is.