We Have To Do Something About These Soaring Gold Prices
Subsidies for Big Gold must end
WASHINGTON– With gold prices reaching record heights in April, gold mining companies are reporting huge profits. 79 percent of all gold mined in the U.S. comes from Nevada, where the state’s senior senator, Harry Reid, is a stalwart defender of the industry. But with the soaring price of gold, the U.S. government still allows the gold mining industry to take advantage of deductions in the tax code. These subsidies must end.
Today, Thomas Pyle, president of the Institute for Energy Research, issued the following statement:
“Yesterday, Harry Reid put forth his solution to rising gasoline prices: ‘We have to do something about these soaring gas prices. We need to take away the subsidies of these five major oil companies.’ By subsidies, of course, he means the ability to deduct business expenses from their taxable income, as other industries are allowed.”
“Washington must also do something about soaring gold prices. With gold prices at new heights, mining companies must be punished for making record profits. Senator Reid must apply his flawless logic to the gold industry: he must strip the gold mining industry of their ability to deduct expenses from their taxable income. Then, as he says will happen with gas prices, gold prices will necessarily fall.”
“OK, we’re just kidding. But this example illuminates the absurdity of the argument put forth by Senator Reid and his allies. Preventing companies from deducting business expenses from their taxable revenues will have absolutely no effect on the price of the commodity. Even worse, it will make companies spend more money on taxes instead of reinvesting in employees, technology, and expansion. If these deductions are so bad for American consumers, why doesn’t Senator Reid propose to strip them from all industries?”
“Senator Reid is talking nonsense when it comes to gas prices. Whether he realizes it or not, his attempt to pass a discriminatory tax policy that singles out the oil and gas industry will do nothing to lower gasoline prices. Instead, he should focus on the Obama Administration’s anti-energy policies that have played a direct role in the skyrocketing price of gas.”