Lower energy costs by raising energy taxes?

The state’s move to lease 74,000 acres in Tioga and Lycoming counties for natural gas drilling has inspired some to call for new energy taxes. One suggestion is a severance tax, “Pennsylvania is the only major gas-producing state that does not have a ‘severance tax’.”

Wait there’s a tax Pennsylvania doesn’t have? That’s no good, everyone knows more tax dollars equals more prosperity (or more money to spend on your re-election campaign).

Taxing the energy companies whether oil or natural gas only exaggerates the problem by taking away incentives to increase supply. But if you are really worried about the government getting a cut of the profits rest assured, the lease already includes a standard 16 percent royalty tax.

For more on why taxes that drive up the cost of energy are a bad policy check out American’s for Tax Reform’s new website – stopenergytaxes.com, and the new campaign from the National Taxpayer’s Union nonewenergytaxes.com.