[Congressional Record (Bound Edition), Volume 145 (1999), Part 13]
[House]
[Page 18895]
[From the U.S. Government Publishing Office, www.gpo.gov]



                THE REAL COST OF TAXING MINING INTERESTS

  (Mr. GIBBONS asked and was given permission to address the House for 
1 minute and to revise and extend his remarks.)
  Mr. GIBBONS. Mr. Speaker, today I rise to address the claim of some 
of my colleagues that gold mines get a free ride because they do not 
pay their fair share of Federal royalties. Well, when considering a 
Federal tax increase on the mining industry, we must always remind my 
tax and spend colleagues to take into account the adverse effect of 
such a tax increase on state and local tax revenues as well.
  There is a direct correlation between increasing mining royalties or 
taxes and the reduction in mining activities. The unintended 
consequence is that State and local governments suffer great tax losses 
by these resulting decreases in mining activities. Federal royalties 
are deductible from the income base on which many of these State taxes 
are levied. This results in an even less tax dollar amount for State 
and local governments. Even a recent economic analysis shows that an 8 
percent gross royalty would cost State and local governments hundreds 
of millions in tax revenues every year.
  Mr. Speaker, it becomes very clear that when a Federal royalty is not 
in the best economic interests of this country or the mining industry, 
we should avoid it.
  Abraham Lincoln had the great foresight when he said, ``Tell the 
miners for me that I shall promote their interests to the utmost of my 
ability, because their prosperity is the prosperity of the Nation, and 
we shall prove in a very few short years that we are indeed the 
treasury of the world.''

                          ____________________