The Ely miner. [volume] (Ely, Minn.) 1895-1986, 1928-08-10

taXatl0n OF mines.
It is very easy for any citizen to
know the essential facts of taxation
and iron mining. If you wish the
amount of taxes paid, secure the last
biennial report of the Minnesota State
Tax Commission. From it you will
find that in the five years from 1921
to 1926 the iron mining industry OF
Minnesota paid over $113,000,000 in
taxes. AS previously explained, the
mining industry pays general prop
erty or ad valorem tax. This Is the
general tax paid on most property In
Minnesota and levied for municipal,
school, township, county and state
purposes. The iron mining industry
also pays super or occupational tax
and in addition, royalty tax. The
total taxes paid in the five year period
were divided as follows:
Ad valorem taxes. ....$ 93,559,lO9
Occupational TAX. 1881. 534
Royalty Tax. ......... 2,768,744
Total .................$ 113 ,309,3
In the five year period 161 ,019,OOO
tons of ore were produced. Dividing
this into the total taxes paid, the aver
age tax was in excess of zoe a ton.
Bearing in mind these figures, some
interesting and important comparisons
may be made.
How Much Are Taxes.
How much should taxes be? OF
course most people will say that their
taxes are too high. But after learn
ing of the tax burden of the Mime
sofa iron industry they will find that
other industry and trade is in much
better position, for the iron ore in
dustry of Minnesota presents the most
startling example of excessive taxation
to be found in the United States.
It is easy to determine what other
industries pay in taxes. Each year
the income tax division of the Federal
Government issues a report called
Statistics of Net Income from Re-
turns of Net Income" This is COM
pilation of all the income tax state
ments and shows the essential facts
of all business.
All trade and industry in the United
States, with gross volume in excess
of 112 billion dollars, paid 1,4@o of its
gross return for state and local taxes
Manufacturing of all kinds pays less
than 1&o. Agriculture and its related
industries pay 2.5%o, while the general
mining and quarrying industry. with
an annual production of over four
billion dollars, paid 2.418o of its gross
return for state and local taxes.
A Fourth For Taxes.
Now look at the conditions in Min
nesota. Consult the report of the tax
commission and you will find that the
average value of ton of Minnesota
iron ore at the mine, in the five years
covered by the report, was $3.11. The
average tax paid of zoe ton cOnsti-
tuted 22.4%o of the value of this pro-
duct.
In 1916 taxes on iron ore were 18c
a ton and TO of the value of the pro-
duct. In the succeeding ten years
taxes have been as high as SLIT ton
and today constitute over one-fifth of
the value of the ore itself.
Perhaps the most scientific measure
ment of the tax burden is its relation
to the value of the product. Upon sucn
a basis the Minnesota mining industry
pays eighteen times as much as manu-
featuring and nine times that which
is paid by the mineral industry of the
United States as a whole.
The people of Minnesota desired to
impose heavy taxes upon the iron
mines. They have succeeded, ulti-
mately we believe, more to their sor-
row than to their satisfaction.
Larger Than Labor.
In industry generally, taxes are but
a small element of expense The fact:
cited above would indicate this con-
dition. Further study shows thai
taxes are small compared to labor, the
essential materials or the larger ele-
ments of expense which enter into the
SOoe Va AiouoIiidi PiOt&uCtiOil NOt d
in Minnesota mining. Refer to the
tax commission report and it will show
that taxes are larger per ton than the
cost Of labor to mine, larger than ma
terials and supplies, than development
costs or royalties. And in some year:
taxes are larger than the cost Of
transportation of iron ore by rail from
the mines to the Head of the Lakes OF
the cost of transportation by water
from the docks to the lower lake ports
But this is day of competition in
iron ore. How do Minnesota taxes
compare with those in competing ore
fields No other state in the union
discriminates against its mineral in
dustry as does Minnesota. Michigan
which ranks second in iron produc-
ton, has no super taxes. It's iror
properties are Systematically valued
and mining communities are substan-
TALLY supported. No other state pro-
ducing iron ore has, as far as the
writer can find, any unusual or ex-
cessive taxation of iron ore deposits
or operations. Most states realize the
great industrial value of iron ore re-
sources and are seeking to encourage
their development rather than PEN
alice their existence. Competing
foreign ores are mined under long
term protective agreements on taxa
ton and Canada will pay substan.
tial bonus of 90c ton for the develop
ment Of its iron ore resources. Canada
win pay bonus to encourage its iror
mining equivalent to Minnesota taxes
per ton Of ore mined, and India has
done likewise.