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

der that the opening of new mines or
the exploring for new deposits has al
most ceased?
AS competition has forced down the
price of pig iron and competition has
forced down the price OF iron ore, the
constant, infiexible and burdensome
element of taxation becomes more SER
ious in its effect. At the time OF the
passage of the occupational tax bill
in 1921 the United States had come
through the greatest period Of indus
trial activity in its history. Taxes, no
matter how large, did not seem to
count for much. But there has been
a change in the iron ore and in the
iron and steel industry as there have
| been changes in all other lines OF
activity. Pig iron is selling for half
of its former price. More than ever
before, taxation has become the DOM
mating element of mining costs and a
dominating influence in Minnesota
mining operations.
AS taxes have increased other things
nave Detu d1CCIC0
No Drills-Few New Mines.
We complain that drills are seeking
no new iron and that development
work in mining is declining. But why
should men seek iron ore which high
taxes will confiscate, or which after
being mined will not pay the labor,
material and taxes? We talk about
| the new efficiency in mining but the
only way that the mining industry has
been able to cope with the increasing
Importance of taxation has been by
adoption of the most modern mechan-
| ical methods We talk of growing
competition but Minnesota Is doing
nothing to encourage the development
of its own iron ores or to prevent and
discourage the investment of capital
in competing ore fields.
AS markets change, competition IN
creases and prices decline, taxes which
remain fixed and interchangeable, become
more important and more destructive
| in effect than ever before. Constant
excessive taxation will further change
the course of mining.
The theory and the facts fit together
| well.
For every dollar received by the
| mineral industry of Minnesota for iron
ore at the mine, % cents is paid for
state and local taxes. For this un-
| usual condition there must be unusual
causes
eff the mining industry were taxed
as other industries in Minnesota are
taxed and the results were those found
today, there would be no cause for
complaint. But in the taxation of iron
ore will be found several discrimina-
tons. Unusual conditions, purpoSely
created, affect the taxation of iron ore.
While communities offer tax induce
ments to manufacturing industries
and, wherever, possible, agriculture is
favored by the tax gatherer, iron min
ing is singled out as an industry upon
which may be placed unusual, unjust
and discriminatory taxes.
Iron Mines Over-Assessed.
'The first of these Determinations
| is the assessment of iron ore at So
of its true and full value Until about
fifteen years ago property in Mime
sofa was assessed at its full and true
value. But in 1913 the classified as
sessment law was passed. Under it,
| true and full value of property is first
determined and the assessed value is
a certain percentage of this true and
| full value That percentage varies
with different kinds of property and
| the percentages have been determined
in some cases by sound reasoning and
in other cases by political expediency.
For instance, HOUSEHOLD goods are as
sessed at $3.50 of true and full value,
| plated property is assessed at 400
farm property at 33-1-39o, while the
| implements of agriculture are assess
| ed at but 1870. Iron ore is assessed at
500 and it is the only property I'm
Minnesota SO assessed.
"The next discrimination is that of
the occupation tax. This is the pur-
poSeful discrimination brought to bear
against the mining industry after f1f-
teen years of agitation. 1t is super
tax, an additional tax. At it will be
shown in later discussion, this tax
virtually forces the mining industry to
pay tax to the state upon taxes paid
| to local communities. In its purposes
and in its operation the occupation tax
is discriminatory and its effects are
| the effects of unfairneSS in taxation.
Royalty Tax Increases Costs.
1.-THE next positive discrimination
enacted into law was the royalty tax.
The terms of this tax which will be
discussed later, add nesrly million
dollars a year to costs of Minnesota
mining. The Legislature of 1928, which
passed this law, intended that the tax
be paid by those who received royal
| ties. The courts have since held that
tax must be paid by the mining opera
tors under the terms of present leases
and thus there was added to the 500
assessment and the occupation tax
law, another discrimination against
| iron ore.
| Most Mines in Municipalities.
"The next factor which is discrimin-
atory in effect is the inclusion Of min
ing properties within municipal limits.
| Agriculture lands cannot be included
within villages and cities. Farming
lands within municipalities, unless
particularly benefited, must be remov-
ed on the petition Of land owners.
Thus village and city limits through
out most of Minnesota are compare
lively small and limited only to lands
i which can nav municipal taxes because