Labor backbencher Doug Cameron has called on the government to ignore the mining anti-tax campaign and increase the Mineral Resources Rent Tax.
His demands come just days after the Minerals Council of Australia (MCA) warned that the mining industry was not a "bottomless pit".
According to the ad "Australian mining already pays 500% more taxes and royalties than 10 years ago and will soon have to pay the new mining and carbon taxes as well.
"Now there are calls for even more new taxes."
While the ad acknowledges the need for the industry to "pay fair and equitable royalties and taxes," it warns that "there is a point where the rush to increase taxes, royalties and charges risks making Australian mining weaker, less competitive and less able to make the important contribution everyone wants for the long term".
The MCA adds that "the first signs of this are emerging".
However Cameron stated that the industry is not paying its fair share, the ABC reports.
"They may not be a bottomless pit but they are a huge pit," he said.
"This is an industry that in 2009/10 made $51 billion worth of profits, $42 billion of that went to foreign-owned companies."
He added that he has already taken his proposals top Federal finances ministers Wayne Swan and Penny Wong.
Shadow treasurer Joe Hockey warned that further taxes, and the increased slashing of the diesel fuel tax rebate scheme, will damage investor confidence in Australia.
CEO of the Mackay Area Industry Network (MAIN), Narelle Pearse, also cautioned the government over increasing taxes.
"It is essential that governments do not take the current success of the industry for granted," Pearse said.
"Mining companies can only sustain so many additional costs. They are looking down the barrel at the carbon tax, MRRT, and potential increased royalties.
"There is only so much that can be accommodated before we seen an impact on investment and competition from overseas markets."
She stated that "we need to be cautious about putting planned investments for the (Bowen Basin) region at risk because in the short term we have a lot of investment ready to come into market, but as those costs creep up and things become unprofitable, decisions will be made to close mines like we have seen this month".