Hey everyone, Bob would like to make a suggestion

A memo that made the news:

May 14, 2009

TO: PLAN Board of Directors and Allies

FR: Bob Fulkerson, State Director

RE: Potential Mining Tax Ballot Initiative

As you are probably aware, there are some ominous signs that
legislators will refrain from closing mining tax loopholes in any
significant way, and perhaps not at all.

I am writing to gauge your support for going directly to the people
with a constitutional amendment in 2010, if mining indeed escapes
taxation this session.

We could consider an amendment to strike the word 'net' and change 5%
to a higher number. Another, even simpler solution might be to just
eliminate the mining tax section from the state constitution altogether.

If we work for a constitutional amendment, we can be sure of two
things: a) The majority of the people of Nevada live in the South, and
they are not at all sympathetic to the mining industry; and b) The
cost to the mining industry will be far, far higher in the long and
short run than the removal of some of the existing deductions.

As we've been pointing out for the past year, the mining industry has
manipulated a sweetheart deal tax system of deductions and loopholes
so well that sometimes mines can produce hundreds of millions of
dollars worth of gold yet completely eliminate their tax burden on
that production. And when the gold is gone, it's gone, along with the
mining companies and Nevada's tax revenue. Maybe constitutional
protection of this industry made sense during the gold rush, but it
cannot be justified any longer.

Please explore the interest of your organization in broadening the tax
base to include mining in the event our legislature fails to act.

Thank you!

Oh no, Bob, thank you.

As I indicated the other day while trying to help the mining lobby understand some of these complicated issues (perhaps I should send the mining association an invoice?), aesthetically I prefer the option of just ripping the mining tax stuff out of the constitution and putting it into state statutes with all the other taxes that everybody else pays. However, I could be persuaded, s'pose, that it would be more practical to leave it in the constitution but change it so that the solar system's largest gold mining corporations end up paying, oh, eight or twelve or fifteen times more to the state general fund than the measly $30 million they're paying now. See? Let no one say that your Gleaner does not have an open mind about these things.

Comments

[Gus]

I think that since its going to take a hell of an effort to amend the constitution at all on this, why leave it in easily-reversed statute?
If you're going to try to win an initiative (twice) might as well shoot for the moon and put the taxation into the constitution.

[Dude]

Oh noze! If the gold miners (now trying to cut their $30 million tax bill - on revenues of $6 billion - in HALF) have to pay one red socialistical cent more in taxes, they will take their gold mines and move to Ohio!
Old geologists joke: It's generally a good idea to have the mine as close to the ore as possible.

[dave404]

Gleaner,

Anybody ever publish the legislative history on the 1989 mining exemption in section 5 of the Constitution?
"Added in 1989. Proposed and passed by the 1987 legislature; agreed to and passed by the 1989 legislature; and approved and ratified by the people at a special election held on May 2, 1989. See: Statutes of Nevada 1987, p. 2443; Statutes of Nevada 1989, p. 2229."

The minutes are available from LCB or otherwise it's a microfiche search in a local law library.

[Michael Green]

I'm in! I'm aboard!

[Scoldy]

Suggested title for the ballot:

"An amendment to the Nevada Constitution to allow the state of Nevada to start taxing mining corporations instead of blowing them."

[paul]

How bought placing a corporate tax on the ballet as well?

[Insouciant Bystander]

@Paul,

OK sign me up, but I'm not sure that taxing Nevada productions of Swan Lake would raise that much money.

[Casino Chris]

And a gaming tax! Ballotize it! Oh wait...nuh guh happen.

[Tim Crowley]

Bring it on, bitches.

[Tailspinterry]

I wonder what the turnout was in that May 2, 1989 special election? And what was the population of the state at that time? Also, what was the ratio of Clark County population to the rest of the state? Demographics have shifted dramatically in 20 years. A "Fair Share" initiative on the ballot in 2010 would win easily.
I'm in, too.

[Tailspinterry]

There's a simple answer to mining's complaint about being singled out for taxes. They were singled out for for the constitutional amendment which caps their taxes to 5% of the net proceeds, which they can manipulate down to nothing. I've read that no other state constitution has an amendment like that.
So revoking it would just restore a level playing field among Nevada's industries and clear the way for the mining multinationals to pay their "Fair Share."

[That Anonymous Guy]

The smart play here for Crowley and the miners is to immediately open negotiations and agree to a marginal mining tax increase this year.

I have no doubt of their ability to slip the tax hook this session -- a rather amazing achievement, given that mining is grossing record profits while the rest of the state spirals into economic Armaggeddon.

But that approach will almost certainly touch off a wave of enraged populism. It is rather difficult to feel sorry for companies like Barrick and Newport when they gross record profits, but simultaneously argue why they can't be expected to help close a billion-dollar deficit. (Yes, I'm sure they'd love a hike in the MBT instead, given that their employment base is minimal compared to other major state industries.)

If legislators side with mining here while asking Nevada citizens to absorb a sales tax hike, it will almost certainly lead Nevada voters to say, "You think 5% is excessive? Oh, we'll show you excessive. How does 10% sound? How about 20%? 30%?"

Pay a little bit now, or get crushed at the ballot box in 2010. Your play, Mr. Crowley.

[Scoldy]

Once upon a time, the drinking/gambling/smoking lobby told the legislature not to ban smoking in grocery stores. The Legislature complied. Then the voters came back and passed a much more stringent anti-smoking law. It could have all been avoided if the big lobbyists had been reasonable...you get the picture.

[CybScryb]

Maybe I've got this all wrong. Isn't the gold located in Nevada soil and a very limited resource? Seems to be that there should be a hefty privilege fee to mine that gold in the form of a reclamation bond. But there are no signs of intelligence in Carson City, regardless of where the occupants reside the remainder of the year.

[Goldy]

Let's also have a constitutional amendment to protect the manatee from any abuse here in Nevada! Both the "Save The Manatee" and the "Kill The Mine" questions, if passed, would have the same beneficial effect for the State.

When will the good, smart people on the left start focusing on the things that matter and actually try to win one?

[Tailspinterry]

How does a modest increase in taxes on multi-billion profits "kill" the industry? We're talking about repealing a special interest amendment, not adding one. In fact, Florida has passed legislation, not a constitutional amendment, to protect manatees from injury by boat propellers.
We good people on the left have been winning a lot lately by focusing on things that matter.

[Goldy]

If I am CEO of a mining company, where do I decide to allocate the assets of my company? Your assumption is that Nevada is the only place on earth with gold. That is entirely wrong. There are places all over the world with lots of gold. Companies take it out where it is profitable. Keep taxing it in Nevada and those assets will be allocated somewhere else.

And what have the good people won?

[Scoldy]

Goldy: Didn't Ralston say you and Perkins would likely be on the other side of this battle if you weren't being paid by the multinational mining conglomerates?

[Some Guy From Nye]

My reply to Goldy would be we are getting shafted right now. (Pun intended). Why not raise the price and see what the market will bear. I'm sure there are site development costs associated with mines in other places or countries that will off set the tax paid to Nevada. Too many individuals in this state don't seem to care if the people who live here starve, are uneducated, or have to pay for the free rides being given to mining and many other corporate interests. But I guess as long as the lobbyists make their dollar, hey screw everybody else huh? I'd run every mine out of this state if it meant people like you would get fired. Some of this reminds me very much of the old stories of carpet baggers in the south after the civil war.

[That Anonymous Guy]

Good Lord. It is indeed true that other states and countries have gold, but please tell me, Goldy... who the hell charges less than Nevada for the privilege of extracting it?

Who?

And are you seriously telling me that gold will immediately become unprofitable to mine if the tax is doubled -- and gold is going for $900 on the spot market?

Again -- mining had better cut a deal, and quick. If you let this go to the ballot box, the miners will get their asses handed to them. And that outcome will be richly deserved.

[Nevada Ned]

Raise taxes on mining. And if they leave Nevada, GREAT!!
Set up a public agency to mine the gold, and sell it, and return the PROFIT to the state treasury.
Never forget - the mining corporations are taking the public's gold from public land, for nearly free. And selling it at $900/ounce.
Nevada will be better off if its citizens get the 100% of the profit in gold mining. Instead of a microscopic tax on the profit.

[Rich]

I say put it on the ballot. If we wait for our lame legislaters the mines will be depleted.

[Goldy]

Anonoymous Guy: Your answer-- Peru. 70% less.