Special Research Report SR-119 Written for state officials, legislators and their staffs, this report provides a discussion of the appropriate procedures for conducting an economic analysis of the effects of proposed new taxes or changes in taxes on owners and operators of solid mineral deposits. (Because of their special characteristics, oil and gas are not considered, though most of the results obtained are applicable to them). Price elasticities of demand and of supply are emphasized as key factors in determining the incidence of a mineral tax and the degree to which a mineral tax can be shifted either forward or backward, and even exported by mine operators within the state to citizens of other states. Income tax, property tax, and severance tax are the focus of the report. However, it is pointed out that the interrelationships between these taxes, their use at the several taxing levels (federal, state, and local) and with other government-mandated charges should be incorporated as part of an analysis of tax changes. Constitutional provisions set important constraints on tax alternatives available to state and local governments, especially the property tax. Principles guiding good tax practice are provided and the relative advantages and disadvantages of the major taxes are discussed. Three analytical methods (relative tax-burden studies, mathematical models, and qualitative economic analysis, i.e. QEA) are described and case studies for coal, construction aggregates, copper, kaolin, and nickel are discussed. The QEA case, along with its detailed solution (available elsewhere), provides easily followed concepts for use by others. QEA is an inherently more flexible concept for evaluating probable economic impacts from a tax because it is based on finding the economic mechanism(s) most likely to explain how the tax will work through the economy, and then drawing reasonable inferences using economic principles and available data. A case study shows that very useful policy conclusions can be drawn from a QEA study of a possible new tax. An appendix that summarizes current state mineral tax laws, a glossary, and a bibliography with over 160 items are provided at the end of the study


Schenck, G. H. K.
Attribution-NonCommercial-NoDerivs 3.0 United States
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Earth and Mineral Sciences College
3.27 MB
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User Theodore Paul Smith has updated HANDBOOK OF STATE AND LOCAL TAXATION OF SOLID MINERALS over 3 years ago
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