Resource rent is a particularly attractive base for tax because it is unearned, being a “free gift” of nature, and because, in theory, taxing does not induce distortions since the rent is paid over and above what is necessary to induce a decision. The tax base is a residual, revenue net of cost including full capital cost. Non-marked capital, such as organization and proprietary processing methods, however, is also vital in extraction and is confounded with the resource in producing value. The twin objectives of capturing rent and avoiding distortion are found to be inachievable and other approaches to taxation are suggested.