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State Mineral Production Taxes and Mining Law Reform


  • John Dobra

    () (Department of Economics, University of Nevada, Reno)

  • Matt Dobra

    () (University of Maryland University College)


Fuel and leasable minerals mined in the United States have historically been subject to federal royalties while locatable minerals have not. In recent years there have been multiple attempts to alter this policy and subject locatable minerals to federal royalties as well; most recently the preliminary 2011 Obama budget included a gross royalty on hard-rock mining on public lands. This paper analyzes the issue of imposing such federal royalties from both a legal and economic perspective. From a legal perspective, it is argued that the state of western property rights precludes royalties on currently extant claims so revenues from a royalty would not be realized for many years. From an economic perspective, it is argued that the effect on revenue would be smaller than one might anticipate due to such a royalty crowding out state levies or encouraging vertical disintegration on the part of mining firms to avoid much of the burden of the royalty.

Suggested Citation

  • John Dobra & Matt Dobra, 2011. "State Mineral Production Taxes and Mining Law Reform," Working Papers 11-001, University of Nevada, Reno, Department of Economics;University of Nevada, Reno , Department of Resource Economics.
  • Handle: RePEc:unr:wpaper:11-001

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    References listed on IDEAS

    1. Besley, Timothy J. & Rosen, Harvey S., 1998. "Vertical externalities in tax setting: evidence from gasoline and cigarettes," Journal of Public Economics, Elsevier, vol. 70(3), pages 383-398, December.
    2. Sotiris Karkalakos & Christos Kotsogiannis, 2007. "A spatial analysis of provincial corporate income tax responses: evidence from Canada," Canadian Journal of Economics, Canadian Economics Association, vol. 40(3), pages 782-811, August.
    3. Devereux, M.P. & Lockwood, B. & Redoano, M., 2007. "Horizontal and vertical indirect tax competition: Theory and some evidence from the USA," Journal of Public Economics, Elsevier, vol. 91(3-4), pages 451-479, April.
    4. Lund, Diderik, 2002. "Rent taxation when cost monitoring is imperfect," Resource and Energy Economics, Elsevier, vol. 24(3), pages 211-228, June.
    5. Diderik Lund, 2009. "Rent Taxation for Nonrenewable Resources," Annual Review of Resource Economics, Annual Reviews, vol. 1(1), pages 287-307, September.
    6. Goodspeed, Timothy J., 2000. "Tax structure in a federation," Journal of Public Economics, Elsevier, vol. 75(3), pages 493-506, March.
    7. Masayoshi Hayashi & Robin Boadway, 2001. "An empirical analysis of intergovernmental tax interaction: the case of business income taxes in Canada," Canadian Journal of Economics, Canadian Economics Association, vol. 34(2), pages 481-503, May.
    8. Gordon, Richard L., 1987. "The mining law: A study in perpetual motion : John D. Leshy Resources for the Future, Washington, DC, 1987, 521 pp, $35.00," Resources Policy, Elsevier, vol. 13(4), pages 297-298, December.
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    1. repec:eee:jrpoli:v:52:y:2017:i:c:p:72-80 is not listed on IDEAS
    2. repec:eee:jrpoli:v:53:y:2017:i:c:p:328-339 is not listed on IDEAS

    More about this item


    mining; taxation; royalties;

    JEL classification:

    • H2 - Public Economics - - Taxation, Subsidies, and Revenue
    • L7 - Industrial Organization - - Industry Studies: Primary Products and Construction
    • Q3 - Agricultural and Natural Resource Economics; Environmental and Ecological Economics - - Nonrenewable Resources and Conservation

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