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View Full Version : Yet More $'s for the Feds!!

AK Nugget
12-13-2012, 10:09 AM

Looks like they're going after hard rock mining, but probably won't be long before they'll be after Placer Mines too!

Time to call & email Begich, Murkowski & Young.


12-13-2012, 03:12 PM
I read this the other day - my wife handed it to me. :)

It applies to "production on Federal lands". The State of Alaska already collects a production royalty for production on state mining claims. These things serve to drive up the price of gold. Australia just went through this type of commodity taxation on gold production.

- Geowizard

12-13-2012, 03:39 PM
No worries. All costs/taxes/excises are borne by the consumer.

Taxes are not relevant. If demand exists, supply will attempt to fill it. Look at tobacco.

We could claim that tobacco is addictive, ergo captive market. By the same token, there are folks that buy PMs religiously. Price goes up, they buy. Price drops, they buy. An addiction is just a habit. Might be physical, might be psychological.

Taxing someone for extracting and selling a resource held in common ownership seems to be justifiable. The other option, Congress rebelled against: patenting the claim so it would go on the tax rolls.

Reno Chris
12-13-2012, 07:15 PM
Overthedge - are you saying that DC politicians are addicted to taxes like a crack head is to his drugs?, because if that is what you mean then I agree.

Despite what many fools think, mining is not normally a high margin business after taxes and fees. If you are making less than 12% margin on your mined product, if this passes you just went out of business. Income taxes are paid only on income. Royaty payments come off the top. Thousands of jobs just gone like that.

Guess I should file for the unemployment dole and start sucking on the government teat like everyone else.

The only good thing is that this will go nowhere in the US house. The old tax and spend twice as much politicians have been calling for this for decades.

Instead, I think we should pass a 100% tax on all assets - not just income - of DC politicians, both elected and appointed. I want to see our politicians live like Tibetan monks, not Kings and Lords over the people.

12-14-2012, 08:02 AM
Mongolia (a socialist republic) passed a royalty on mining in 2006, Rio Tinto and several major mining companies originally threatened to pull out. Note: They had already gone through the process of jumping through all of the hoops and investing in prospecting, exploration, feasibility, including the cost of equipment to begin mining. In a socialist system, all of the resources belong to all of the people. Handouts make politicians in any form of government popular.

Australia (a commonwealth) followed in the same steps to impose a mining royalty on mining. The law was origially to cover gold, iron and coal production. It passed without including gold.


The Phillipines imposed a 7 percent tax on gold production and now, 95 percent of the gold is smuggled out of the country.



"There's been agreement for a long time that the 1872 mining law should be updated to include a royalty" and reduce paperwork, said Senator Lisa Murkowski, the panel's top REPUBLICAN. :)

- Geowizard

12-14-2012, 11:37 AM
If this passes then quite a few mining companies will have to close down...because the profit margin will not be sufficient to stay in business. There goes a bunch of good jobs, down the drain...

12-14-2012, 12:05 PM
The politicians are Oliver Twist asking for more with an army to take it if we refuse.
Geowizard, you appear to be wearing rose colored glasses when you compare the US to Mongolia, Australia and the Phillipines. The US is a Constitutional Socialist Republic. Socialism buys votes.
My actual preference is a sales tax on non-essentials. Among these non-essentials is financial services, stock and bonds. Why don't we tax campaign contributions? Why don't we call day trading what it is, gambling, and tax it as such? Why do we permit folks to write off gambling losses against income?

Why do we penalize savers? We lose roughly 10% of the purchasing power of our money each year due to inflation.

Royalties will pacify most of the oxygen thieves, but my preference is patenting.

are you saying that DC politicians are addicted to taxes like a crack head is to his drugs?

No. Crack heads are self-eliminating. It is not just DC politicians. Almost all of them are on power trips. They were bullied in school and now they are in control. They are now somebody!!! Take away money, take away power.

There is no doubt that mining is mostly low margin if and when production happens. Often, it is a loss and no mine happens. We have to remember that the naugies are liberal arts majors and have no in-depth knowledge of science, technology or math. However they have substantial knowledge in philosophy and political science (science?).

DEF: Naugie, n, derisive term used to describe those who ride the Naugahyde aka curious non-producers (CNPs).

It costs money to manage a nation that abides by the Constitution. The money must come from somewhere and import duties support inefficiency. Import duties worked well during the US westward expansion era, but are counter-productive now.

Quit sticking to just the Constitutionally mandated stuff and expenses increase disproportionately.
None the less, the consumer pays all the bills. ALL.

History is replete with examples of "the more onerous the tax structure, the larger the black market." I've seen figures of 40-50% of Italy's economy is black market. In the US, even barter is taxed.

What do you or anyone else expect when people are paid to remain unproductive?

Everything, land, people, businesses are either productive or expensive. Expenses have to be paid. If it ain't productive, the money has to come from somewhere.

The easiest way to solve all our problems is an Amendment that prevents voting if your household received a government transfer check in the last 6 months.

Though there is a great deal of mythology about the cause of the Revolutionary War, one mantra was, "No taxation without representation." According to Romney's spiel, we now have at least 47% that have lots of representation with no taxation.

The no taxation thing makes me want to eliminate all 501(c) corporations. But I don't discriminate, eliminate all corporations and return them to company status. LLC is not a good idea either. Owners must be liable.

Which means we must address tort reform.

But to accomplish any of the above requires knowledge. Which leads us to the factory model of education. Only the wealthy can afford to have their offspring classically educated.
Factory model: memorization
Classic: Logical thinking and reasoning

So how is that student loan debt thing going? And your degree is in Medieval Art?

If archeology is so important, why isn't there a substantial finder's fee law on the books? It isn't that important, but we have to protect the sites so our archeologists have a job. Productive or expensive?
All of the above is nonsense. The PTB, their loyal electorate and every special interest group have a vested interest in maintaining the status quo. Due to the complexity of our laws, any tinkering creates a tidal wave of conflicting laws.

It is all a cobbered together mess that if converted to material would resemble a massive landfill with no fence and carrion birds, rats, flies and junkyard dogs competing for scraps.
Murkowski (nee Martel) may not be the best, but she is slightly better than Harry Reid. Democrats/republicans, same coin just different sides.
The question is irrelevant, the answer is science. I like the paraphrased Laws of Thermodynamics. It is applicable to everything.
Everything is connected to everything.
Everything has to go somewhere.
There ain't no such thing as a free lunch. TANSTAAFL

Everything living is completely dependent upon economics and psychology. Politicians run a con and our economy proves it.
Yah, a rant but I'm just a ray of sunshine on a cloudy day. So how's your day going? Folks, we gotta do what we can with the cards we are dealt. If the politicians don't start fixing things pretty soon, a new deck will be broken. Might be a few problems playing poker with a pinocle deck. Be careful what you wish for.

Reno Chris
12-14-2012, 12:45 PM
Australia implemented this, and other than the gold sector which was exempted, the mining sector in Australia has been shrinking ever since. In third world countries, you can hide or bribe your way to lesser payments. That's why 95% of the Philippines gold is smuggled. You can't do that in developed nations, so you basically go out of business.

Politicians use government money to control others, purchase their own re-elections, assist their friends and family and of course enrich their own wealth. They always want more. I still think there should be a 100% tax on politicians - they are all wealthy already, so take away the money and let them be poor.

In a socialist system, all of the resources belong to all of the people.
That is what empty headed "useful idiots" are taught in college. I sat and listened to professors spout this kind of horse manure in classes I attended. In socialist countries, like any dictatorship, all the resources of the country belong to those in power - that's the reality, not the theory. Those in power are free to distribute their county's monetary resources to their family and friends, use those resources to live in luxury while the populace starves, ship vast amounts of money to Swiss bank accounts, run giant propaganda campaigns, rig elections, suppress the common population and if anything is left over maybe give a handful of rice to to the poor, so they will look upon their socialist leader with thanks.
The differences between a socialist dictator, a militaristic dictator, an Islamic dictator and other kinds of dictators are minor and difficult to distinguish - often more than one designation applies. As an example, what kind of dictator is the man in charge of the Socialist Nation of North Korea? How about the Fidel and now Raul of the Castro Family in Cuba? Most dictators see themselves as Socialists.

12-14-2012, 01:14 PM
So, the great thing about a democratic republic is that we vote in politicians that dictate royalties to be paid my the hard working minority mining companies that get paid to the tax payers.

"But applying a metals levy of 12.5 percent - the benchmark government share for other resources, - could deliver hundreds of millions of dollars a year to taxpayers, according to independent studies and US Representative, Raul Grijalva..."

I don't see the difference. I guess it's the rose colored glasses! They're justifying the same cause to effect the same end.

- Geowizard

12-14-2012, 03:39 PM
applying a metals levy of 12.5 percent

Here, you and I are in complete agreement. Any form of a production tax fails to consider production expenses. A royalty must be based upon net profit.

I prefer to move the mine on to the property tax roles by patenting. Property taxes are local. I'm all for starving the beast.

Yes sir, we elect our thieves. First, last and always, Robin Hood was a thief. He handed out transfer payments. His band of merry men were just the administrative costs of maintaining his bureaucracy.

The rose colored glasses was in reference to considering the US politicians as different from those in other countries. Bribes are against US law, but you can hire a lobbyist to accomplish the same effect. Congress only disciplines those members that have incurred the wrath of the public. They nailed Gingrich over the cell phone conversation. They prosecuted the couple that taped the conversation. And Rep. Wright who made the conversation public walked off Scot free even though what he did was a felony and he voted for the law. There is no American exceptionalism. But we have some exceptional people.

We have allowed the US to turn into the worm Ouroboros. Eating itself to stay alive.

I tend to agree with Chris. This fool tax law will go nowhere for the next 2 years. Entrepreneurship in the US is at an all time low, <8%.

We've got to get the economy moving again and the foundation is always resource development. Even people are a resource and we cut them out of the entrepreneurial loop by onerous taxation and ridiculous levels of regulatory hurdles to overcome.

We inflated the labor costs and then mandate what level of wage a prospective must get. There is no, "I'll do it for half that price." Even the few entrepreneurs left are getting nailed by the IRS for attempting to contract stuff out in the US. If you want to contract the same job out overseas, no problem. USAID will help you by spending our tax dollars.

I need to shut up.