Vitter tells Sen. Reid: Put "Big Gold" Mining Tax Credits on Table for Cutting Too
U.S. Sen. David Vitter today sent a letter to U.S. Senate Majority Leader Harry Reid asking him to consider eliminating gold mining industry tax breaks since Reid has proposed eliminating tax breaks for domestic energy producers. Last week Sen. Reid circulated a letter to colleagues that suggested increasing taxes on domestic energy producers would be beneficial to the economy. The premise for his letter was based on domestic energy producers' increased profits.
"If the linchpin of Sen. Reid's energy policy is to increase taxes on energy producers simply because they've increased their profits, I would suggest he look to broaden his budget scalpel's range by applying the same tactics in his own state of Nevada and eliminate gold mining industry tax breaks," Vitter said.
The text of Vitter's letter is below.
May 9, 2011
The Honorable Harry Reid
United States Senate
S-221 Capitol Building
Washington, D.C. 25015
Dear Leader Reid:
Last week you circulated a letter to colleagues that suggested increasing taxes on domestic energy producers would be beneficial to the economy and help lower the price of gasoline at the pump. I wholly disagree with the premise of your letter and your likely legislative action in the coming weeks. We shouldn't focus our attention on specific tax credits for specific industries. In fact, we should engage President Obama on his offer to seriously consider lowering our top-ranking corporate tax rate, which would eliminate the need for any industry-specific tax credit.
However, if one were to agree with your assertions, I would suggest you look to broaden your "budget" scalpel's range by focusing on your own state of Nevada and seeking to eliminate gold mining industry tax breaks.
Over the last two years the price of gold has nearly doubled. In fact, the trend in gold prices is quite similar to the trend in oil prices under this administration. If the only solution you can put forward to create jobs and lower the price of oil is to increase taxes -- rather than boost domestic production here at home -- then surely your strategy of increasing taxes would have the same effect on those who reap significant profits from Nevada's gold mines.
Secretary of the Treasury John Snyder stated in 1947 that "there are no grounds which would justify instituting a subsidy to encourage the production of gold in this country." Sixty-four years later, "subsidies" are still being supplied to gold producers during this period of soaring gold prices.
I would suggest and hope that you would, at the very least, uniformly apply your policy choices to all industries that receive tax breaks, instead of continuing the Obama Administration's irresponsible pattern of picking winners and losers that has done very little to stabilize our economic recovery. I would argue that, instead, it has created much more economic uncertainty while simultaneously expanding the size and reach of government in this time of already unsustainable deficits.
United States Senator