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By Karoun Demirjian (contact) 
Monday, Feb. 14, 2011 | 3:45 p.m.
President Barack Obama pauses during a speech outside Orr Middle School at a "Moving America Forward" rally Friday, October 22, 2010.
Harry Reid
Sun Archives
- Is low-taxes sales pitch enough to bring businesses to Nevada? (2-11-2011)
- Gaming, mining industries become early targets for taxes (2-8-2011)
- Don’t buy faux benevolence in tax debate (1-9-2011)
- Going after mining tax, despite the Harry Reid factor (1-17-2010)
- Democrats quash mining tax to bolster Reid’s reelection hopes (12-6-2009)
- Group pursuing initiative to raise taxes on gold mining (12-3-2009)
- Mining’s boom does little for Nevada’s bottom line (9-7-2008)
- Mining law reform considered in House (2-26-2009)
Sun Coverage
WASHINGTON - There are two basic ways to bring down a deficit: cut spending or raise tax revenue. There’s plenty of both in this budget.
But one proposal is bound to rub a long-standing Nevada industry the wrong way.
In an effort to “provide a better return to taxpayers from mineral development,” the president is proposing a wash of new royalties and fees on the hardrock mining industry, that he says, along with reductions in oil and gas subsidies, will save the country $3 billion over the next 10 years.
It’s a slice that’s bound to put Senate Majority Leader Harry Reid -- who’s been praising Obama’s budget as “a serious attempt to make those tough choices” -- between a rock a hard place.
For weeks now, Reid has been directing a budget-minded screed toward Republicans, deriding them for trying to protect billions in subsidies to oil and gas companies while being willing to slash those dollars from entitlements, social programs and job training programs.
Reid’s also been a loyal backer of the hardrock mining industry, and while he's said in the past that there’s room for "common sense reform," he’s not a proponent of slapping the industry with fees that could hinder its continued growth.
But now, it seems, he might be willing to abandon his previous principled stance in favor of supporting the president's initiative to scale back everywhere -- including close to home.
“I'm willing to consider any proposal for mining reform that protects the mining industry, doesn’t kill jobs and shares revenues with the state," Reid said in a statement released Monday. "I will carefully study the president’s proposal to determine whether it meets these criteria and ensures that one of the pillars of the state’s economy can continue to create jobs and strengthen the economy.”
The president’s budget proposes instituting new royalties on silver, gold and copper hardrock mining, would require that states receiving mineral revenue payments pitch in to help some of the costs of managing the mineral leases that generate that revenue in the first place, and would establish a new fee structure for reclaiming abandoned hardrock mines -- a plan to hold the hardrock mining industry responsible for environmental impact in much the same way as the coal mining industry is expected to cover such costs.
While hardrock mining takes place all over the West, the changes will likely resonate most acutely in Nevada, where about 80 percent of all the gold mined in the U.S. is produced. It’s also an industry that is one of the few in the state that’s been on the upswing, as the price of gold per ounce has risen (in 2009, Nevada produced about $6.7 billion worth of gold).
Nevada's mining industry is also used to enjoying robust protections enshrined under the state constitution, which says that only actual proceeds of mines can be taxed. Standing in even sharper contrast to the president's proposal is that back in 1863, Nevada's constitutional drafters explicitly rejected suggestions that non-operating mines could be subject to taxes and fees.
The president’s proposal isn’t the first time in recent history that Congress might try to levy new taxes and fees on the hardrock mining industry. In 2007, a Democratically-led House passed the “Hardrock Mining and Reclamation Act” by a vote of 244-166 -- but that died at the door of the Senate’s gatekeeper, otherwise known as Harry Reid.
Of course, even Reid’s apparent willingness to parley doesn’t mean an overhaul of the industry will now be smooth sailing. Republicans don’t usually warm as well to environmentally-minded mining legislation as Democrats. Of the 166 who voted against the 2007 bill, 163 were Republicans -- and their ranks included the three men who now run the GOP’s House leadership team: Speaker John Boehner, Leader Eric Cantor and Whip Kevin McCarthy.
Amazing how corrupt the NV politicians are, regardless of party, when it comes to the mining industry. They do next to nothing for the state, take our natural resources, and ship the proceeds out of state/country. So we (the state) get nothing, but the politicians get campaign contributions.
At least gaming employs a ton of people and a lot of the executives live in the state.
That is why I voted for Angle...............Reid is a chameleon and a job killer for Nevada
Harry's a putz, he'll go along with obuma regardless of the consequences. The only industry in the state other than gambling that's doing well doesn't need to be jeopardized with higher taxes. Tax non-operating mines, now that's just plain stupid. Leave it to obuma, the dumbest sob on the planet.
WATCH ALL THE BACK ROOM DEALS THAT GET PUT IN PLACE ON THIS BILL !!!
We already killed gaming. Just like Egypt, be careful what you wish for. This is a big planet and if mining picks up and leaves, Nevada becomes a ghost state! The tax and spenders have no clue how many towns completely rely on mining in Nevada. Heaven help Nevada if mining disappears.
Just more squabbling amongst the dictators of social theft -- not as to whether stealing is wrong and should be eradicated or that taking from others promotes spending addictions which lead to enormous public debt -- but rather a sinister plot as to who shall be further victimized by the proliferation of its unjust legislative dictates -- a "tough spot" cited by the propagandists?
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$6.7 BILLION in gold alone in 2009 raped out of Nevada soil with tons of arsenic and acids left to leach into the soil and we only got $190 Million. Even a small 15% royalty would be almost a billion and that is JUST gold.
The lawmakers in this state are either corrupt or incompetent. I do not know which is worse. At least corruption can be predicted, the actions of an incompetent are harder to understand.
tbvegas;
"pick up and leave"???? you are insane. mines are very hard to "relocate". Mining companies are paying $800 per oz of reserves to countries right now for the right to mine them. We are getting around $30 right now. They are laughing their butts off at people like you. Thanks for supporting south african, canadian and australian companies' profits with your opinion.
Harry should have been removed....
Six more years of Harry will doom Nevada...
"I'm willing to consider any proposal for mining reform that protects the mining industry, doesn't kill jobs ..." - Reid
I thought Reid was a Democrat. That sounds more like the TEA Party to me. The statement implies a presumption that any reform will be killing jobs (and I thought politicians weren't supposed to use language like that anymore, too.)
Let's not overlook the blatant favoritism being displayed.
Politicians in this state are nothing but slaves to special interests. Both parties are to blame and few seem immune. Let the feds tax the heck out of mining. At least then there's a few pennies might trickle down to us.
Mining companies cannot and will not "pick up and leave." Neither will there be a loss of jobs. If we raised taxes on mining in NV, the worst that would happen is that the current owners would sell to someone who recognizes that they'll still make a pretty profit even with higher taxes. And you need human beings to go into the ground and get the stuff. This isn't like closing down a store.
bof - don't quote Reid from 1979, ask him should be done today.
And quote Jefferson instead: "I fear for my country when I reflect that God is Just".
Remember, we have a Federal Judge for a Governor. Here come da Judge!
That was a direct quote from the article above, not 1979.
It's about time their made to pay.
bof - "I'm willing to consider any proposal for mining reform that protects the mining industry, (if it) doesn't kill jobs".
First of all, you did not replicate the quote correctly.
What Reid's quote really said, is that if the proposal kills jobs, then protecting the mining industry is NOT THE PRIMARY OBJECTIVE.
Re-post the quote with time, date and reference information, and then read (Reid) it again!
Sure let the FEDS have it, why would Nevada need that money.
To all those TEA BAGGERS, if you don't tax it locally it will be taxed nationally.
What a bunch of suckers!
No one can do more for the mining industry.
Harry Reid recently scoffed at President Obama's pledge to veto bills with earmarks. This is just presidential retribution.
As usual, all the liberals are quick to point out how much was earned by the mining companies, but failed to mention how many were employed and earning a steady living at the mines.
Come on Legislature do some RESEARCH. ELIMINATE MINES EXEMPTIONS FROM SALES AND USE TAX--they do NOT pay double tax. NRS 372.270 exempts those subject to net proceeds of minerals from Nevada sales and use tax. While at it, eliminate NRS 372.320 occasional sales / purchases exemption. FIREFIGHTERS BUY THEIR PRIVATE PLANES SANS TAX. And eliminate exemptions for reloading ammunition, installation labor, grooming services.... ELIMINATING EXEMPTIONS is not as bad as new taxes.
And Legislature, please enact requirement for FINGERPRINTS with applications for social welfare benefits. WE NEED A WAY TO COMBAT FRAUD--I.D. theft and name changing to keep receiving benefits after 2 years. Let's get the legislation and take the prints. Sure it's gonna take the feds some time to get their act together but LET'S WORK TOGETHER TO COMBAT MEDICAID/MEDICARE FRAUD AND ILLEGALS LEECHING OFF AMERICAN TAXPAYES.
Does Harry the Hater follow his owner or his handler?? The man who pets and waters him every day, or the one who throws expensive parties and lavishes him with gifts and donations? Hmmm... tough choices indeed... Glad he's there for Nevada!
anchorbine, I'm definitely not a liberal, but the mining industry pays such an insignificant amount in taxes relative to what they're taking in, and the companies aren't located in the state, so the profits go elsewhere. Executives don't live here, so they don't do much of anything for the community (other than contribute to political campaigns).
Last I read, the entire mining industry employs about 5,000 people (directly, I don't have much faith in the "indirect employment" information). That's about the number of people that just ONE, mid-sized strip hotel/casino employs. So why do they deserve such a great deal?
YOU all voted this bum back in and the nation suffers.You can all wallow in the pain you have brought on yourselves! Its too bad the nation suffers as well!!!
Actually it doesn't because the Republicans are going to be against it so Reid can say "Sorry, not enough votes." without ever having to clarify his own position on it.