Budget cuts for everyone: except for mining industry subsidies?
Today, Senator Shaheen (D-NH) introduced the Elimination of Double Subsidies for the Hardrock Mining Industry Act, which would save U.S. taxpayers hundreds of millions of dollars by eliminating an outrageous tax deduction for the mining industry. In an era of budget cuts and calls for increased fiscal responsibility to reduce the federal deficit, giving double subsidies to exceedingly profitable industries is a move in the wrong direction and Senator Shaheen s legislation would finally end this ridiculous corporate tax break.
When you think of mining in the United States, the last thing you probably think of is the tax code. But, a provision in the tax code accounts for one of the largest subsidies received by the mining industry each year. This subsidy has a name that only the IRS could come up with the Percentage Depletion Allowance.
The Percentage Depletion Allowance, or PDA, permits a mining company to deduct a set percentage amount of its gross annual income when calculating its federal income tax, based on the fact that the value of its assets (the minerals in the ground) decline as mineral production progresses.
The PDA applies nationwide to mining operations on private and public lands, and constitutes an exceptional tax break for U.S. mineral producers beyond those granted to other private industries.
Why is the PDA for the mining industry better than tax breaks for other industries, you ask? Because the PDA allows mining companies to take tax deductions on mineral deposits that they received for FREE under the antiquated 1872 Mining Law, the PDA constitutes a double subsidy. You take the gold, copper, silver, uranium or other metals from public lands for free, and then you get to deduct the value of part of those minerals from your taxes even though you never paid for them in the first place!
Tax time is coming up, and while I am sure there are a few of us that would love a tax deduction for something we never paid for, the PDA robs us, the taxpayers, of hundreds of millions of dollars that is rightfully ours. EARTHWORKS joins with taxpayers everywhere to applaud Senator Shaheen for working to end double subsidies for the mining industry while also trying to reduce our mounting federal deficit.
Tagged with: subsidies, senate, percentage depletion allowance, pda, mining, hardrock mining
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