Thursday, August 5, 2010
Mining in Nevada: The Henderson Democratic Club Forum
I have to hand it to the Henderson Democratic Club again... They know how to keep the fireworks going long after the Fourth of July! Last night, they hosted a forum on mining issues. Tim Crowley from Nevada Mining Association (NMA), Pete Dronkers from Environment Nevada, and Mr. Gleaner himself (Hugh Jackson) stepping in for PLAN all came to talk mining and give each of their own unique perspectives of what's wrong and what's right with the state's mining industry.
If we're to believe NMA, mining pays more in taxes than anyone else. "We pay 5% of net proceeds, and we are the only ones to do so," said Tim Crowley. He argued that other businesses only have an effective tax rate of 3.64%, while they have to pay a 5% tax rate on their net proceeds.
Crowley also said, "We don't oppose paying our fair share... It just has to be done in thoughtful way." He explained that NMA supports a broad-based corporate income tax (to be fair, that's even to the left of Steven Horsford!), but "don't single us out... Let's look at everybody."
Funny enough, Hugh Jackson started off in agreement with Tim Crowley on corporate income taxes... Then added, "It's not either/or. We should do both!" Jackson then argued that "all other states & countries have single industry specific taxation" in addition to regular corporate income taxes. He then described how the tax rate on paper may be 5%, but the effective mining tax after deductions is really 0.8%. Apparently, there have even been years when Barrick and Newmont (the two largest mining conglomerates doing business here) have paid ZERO in taxes. "The state general fund got about as much taxes from our great mines [in the last decade] as we did from rental cars," added Jackson. Even as gold prices and Barrick & Newmont profits hit record highs, mining still only paid $48 million this year... And after the mining industry sold $5.7 billion in minerals from Nevada in 2008, they only paid $40 million in net proceeds taxes to the state’s general fund.
So what's the solution on taxes? Is it fair to single out one industry, one industry that is the lifeblood of rural Nevada? But is it fair to give one industry so many tax breaks? What's the fair solution?
I posted some more of last night's forum on my Twitter @atdleft if you're interested. It certainly got me to think more about the state of our state, and where mining should fit in.