OCR Text |
Show EDITORIAL: A Tax Against Utah A severance tax is in preparation prepara-tion for the Legislature. And, it begins to appear as though the would-be developers of Utah's natural resources might be soundly hit with a levy for mining min-ing the state's ore, developing its potential oil fields or making use of its phosphate beds and uranium deposits. In broad terms the severance proposal will tax virtually all natural resources in the state, and by so doing will stunt Utah's industrial growth in its infancy. To sweeten the bitterness of the anti-industry severance tax bill its sponsors have coated it with certain exemptions exemptions ex-emptions which would not lessen the damaging effect of a general .severance tax one iota. For example, ex-ample, the bill would exempt small operators and apply a reduced re-duced rate on natural resources, "processed, fabricated or consumed con-sumed within the state." Granting small operators immunity im-munity from a severance tax in the hope that industrial development develop-ment will receive its needed stimulus stim-ulus is a vain hope indeed. It reflects re-flects how little the champions of the resources tax actually know about Utah's natural wealth. Small operators within the state have been pecking at the earth ever since General Connor ordered his men out of Ft. Douglas Doug-las and into -the hills to mine. But these operators have not brought Utah to its full industrial indus-trial capabilities. Nor will they, because the industrialization of . Utah is dependent upon its natural nat-ural resources, and the development develop-ment of these resources hinges on unfettered capital, wnicn is something small producers lack. Utah's touted mineral wealth cannot be put to beneficial use by the employment of a pick and shovel. For though the state is highly mineralized its minerals are marginal, or low grade, and the extraction and processing' of low grade ore is a tremendously expensive procedure even under limited operations. Utah is wealthy because it has an abundance of low grade ore. But to develop this marginal desouxce requires working capital cap-ital 10 times greater than that needed for mining and processing process-ing the pure ore of the Great Lakes region. Companies which possess the know-how and thg money to enlarge en-large Utah's mineral out-put cannot can-not afford to pay a severance tax on top of the other demands of state government and at the same time annually expend gigantic gi-gantic sums for extracting low grade ore. Neither will it be practical for them to build fabricating fab-ricating plants in order to avail themselves of a reduced severance sever-ance tax. The proposed bill to levy a tax on Utah's natural resources is nothing short of contemplated industrial suicide. Its supporters would be using sound reason if they carefully investigated the "untold wealth that underlies Utah," before introducing the bill. |