Sam Gibbons: “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…”

“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."”