On November 2, 2007 the US House passed a new mining law that mandates a 4% gross royalty on existing mines and an 8% royalty on future mines on public lands. The royalty, if imposed, represents expropriation over and above the corporate income tax mining companies presently have to pay. It also represents the common view that the proceeds from mining — or any other endeavor for that matter — if carried out on public lands are the property of the general population. In other words if a miner goes to the effort of looking for, finding, developing, and producing copper in Utah, everyone in Florida is entitled to the fruits of his labor just because people in Florida happen to live within a political area that also encompasses the mine. This argument sounds awfully like slavery. Making prospecting in the United States unprofitable reduces the portion of the earth prospectors have to work with, thereby raising the costs of living for all people, regardless of where they live. The only beneficiaries of such a royalty would be the state and the privileged groups to whom it decides to dispense the proceeds.
Morgan J. Poliquin
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The Mongolian state imposed what it has termed a “windfall profits” tax on mining carried out in that country. As Morgan J. Poliquin explains, this tax is so punitive that its imposition is tantamount to nationalization.
Legislating sustainability, writes Morgan J. Poliquin, is another attempt to replace the collective decisions of many in the market place with the coercive will of the few.
