The Redwood gazette. [volume] (Redwood Falls, Minn.) 1873-1940, 1929-01-23
WEDNESDAY, JANUARY %, 1929.
THE ORE TAX.

THE time has when citizens of Mime
sofa are looking toward the northern part
of their state with the realization that
something must be done to help out the two
greatest industries of that section. The forests
which gave hundreds of men work during the
winter months practically gone. Mines all
over the Range section closed entirely or
working only part time. What are the residents
of that section to do for self support; what is
the result on the rest of the state OF these
serious inroads on two great resources?
1t is time to stop and think about these
questions The editor of the Minneapolis Journal
thought the other day about the mining situation
and then he wrote this:
The world is using more iron today than
ever before in it's history.
The greatest readily accessible deposits Of
iron ore in earth are right here in Minnesota.
Yet today the Minnesota iron industry is
dying on its feet. Mines that should be open,
are closed. Range towns that should be BOOM
ing, are dwindling Communities that should
be prosperous watching gradual shrinkage
of the pay rolls that keep them alive. Not only
that, but there is a growing danger that the
industry will go clear to pot once the operating
companies finish Swimming the remaining cream
from the richer deposits.
Minnesota has been strangling, in a moose of
taxation, the goose that lays the golden eggs.
Seeking to save for public uses the public's due
share of the heritage of wealth that nature so
lavishly spread through the North country, Min
nesota is in danger Of making that heritage we'll
nigh worthless. No industry can long survive,
when taxes make up half it's cost of doing bust
ness. Yet that is what Minnesota has been ex-
acting of the iron ore industry
There is no question of Mnnesota's moral
right to seize by taxation from wealth that
comes out of the ground in the form of iron, a
greater share than from the wealth that comes
out of the ground in the form of crops. The
principle underlying recapture of part of a
great natural resource, is sound enough. But it
has been overworked Tax has been piled upon
tax, until the industry is threatened with ex-
tnction.
In the days when there existed no means for
the State to levy on the output of ore, there was
devised the alternative method of assessing ore
in the ground at higher percentage of it's true
value than any other property in Minnesota.
And the ad valorem tax levied on this onerous
assessment is repeated and repeated, year after
year. Thus a man unfortunate enough to have
that land, and that ore, sold for taxes.
Came later the occupation tax, for the benefit
of the State at large Also for the benefit of the
State at large, the royalty tax originally intended
to catch the ore owner, but passed on to the
leasing operator, along with all the rest of the
ore owners taxes.
So the operator now pays local taxes on the
in the ground out of all proportion to its
value. He pays fixed royalty to the ore owner
for every ton taken out He pays the State a
six per cent tax on these royalties: If, after
paying these taxes and royalties, and his oper-
ating expenses, he has anything left the State
takes six per cent of that as his occupation tax.
On the sadly diminished remainder, the Federal
Government collects an income tax.
Any wonder, then, that the operator is hur-
riedly stripping out the richest ore, preparatory
to closing up shop, when this is gone?
Collapse of the ore industry would be q
catastrophe for both the Range country and the
State at large. Yet the ore industry is plainly
headed for collapse, unless its tax burden is
ightened.
The lions share of the ad valorem tax money
goes to the Range communities, which spend il
freely and often foolishly So tax relief can best
be applied at that end of the line. The per capita
limit on municipal spendings, fixed few years
ago at 500 for municipalities and $50 for schools
was set too high. It should be reduced still
further.
But equally important and necessary is the
reduction of the assessment rate on ore in the
ground Before the royalty and occupation taxes
were laid, there may have been an excuse fo,
assessing ore bodies at fifty per cent of their
actual value, in contrast with the lower per
centages enjoyed by all other kinds of property
That excuse no longer exists Unmined ore
against which an ad valorem tax is levied year
after year until its value is eaten up, should b
assessed at no greater percentage of its rea