Thursday, February 28, 2013
Mining Company Finds Gold In Taxpayers Thanks To 21st Century GOP
1. The republican mining bill diverts part of tax proceeds (40 percent) away from local governments and taxpayers impacted by the mine and instead sends it to the state's GOP Donor Center, the WEDC.
2. Under Grover Norquist's order, the bill forbids the state from charging a tonnage tax on extracted resources taken from the land. Taxpayers lose twice.
3. The bill's mining tax will not generate much revenue in the first few years of the mine’s operation. That’s because the mine will be required to pay a tax on its net proceeds, and the significant investments in machinery and equipment required at the beginning of the mine’s operations will reduce the mine’s proceeds and therefore the amount of tax owed by the mine. Some other states, such as Minnesota, tax mines based on their output.
4. A new tax credit for manufacturers, agricultural producers, and mines gradually reduces Wisconsin income tax rates for corporations in these industries from 7.9% down to 0.4% in 2016. That means a corporation, such as a mine, with $10 million in taxable Wisconsin income would go from paying $790,000 in 2012 in corporate income tax to paying just $40,000 in tax in 2016. Who will pick up the difference? Taxpayers.
5. The bill would also cut tax revenue for environmental protection and recycling programs by $171 million per year. Currently, mining operations in the state are required to pay a $7.02 fee per ton of material removed from the Earth. The GOP's bill would waive the $7 recycling fee, dropping the cost per ton to less than 3 cents.
Cutting the existing recycling fee is unrelated to the tonnage-tax proposal Sen. Tim Cullen of Janesville offered that Grover Norquist struck down. Wisconsin is still facing a budget shortfall as a result of massive tax shifts and cuts under Gov. Scott Walker. Another $171 million in tax cuts for businesses would make the budget deficit even more daunting for the state's wage earning taxpayers.
Wisconsin Budget Project - Tax Issues Fly Under The Radar In Mining Controversy
Bloomberg Business Week - Wis. mine bill would slash money for environment
Rock Netroots - Lord Norquist Forbids Wisconsin To Tax Extracted resources
Posted by Lou Kaye at 2:32 PM