Debunking Severance Tax Rhetoric

Here’s my letter to the editor in the Public Opinion responding to Matthew Major’s fact-deficient editorial on drilling:

Matthew Major’s editorial on corporate welfare and best drilling policies scrapes the bottom of the content barrel, failing to accurately explain either topic to readers.

“Corporate welfare” is taking tax dollars and giving them away to fund otherwise unprofitable businesses like Solyndra. Major is calling for singling out the drilling industry — which is creating tens of thousands of jobs, rescuing families from foreclosure, and generating prosperity for small-business owners — to impose yet another tax on it.

Pennsylvania already has the 10^th highest tax burden in the nation, and the drilling industry pays the same taxes as every other business in the state. This amounts to more than $1.3 billion in state taxes since 2006. Other states that have natural gas taxes have friendlier business climates-for instance, Texas and Wyoming have neither income nor corporate taxes.

Major’s line about legislators sacrificing the environment for drilling – straight from the anti-drilling, frackophobic handbook — is based on emotion, not science or experience. The Department of Environmental Protection continually evaluates and improves regulations to ensure protection. Even a cursory review of the Governor’s proposed drilling regulations shows the new rules are far from the industry handout Major claims. Most of the setback requirements and bonding requirements exceed those of neighboring states.

Gov. Tom Corbett is pushing for a principled natural gas impact fee where local governments can charge a fee if a driller is not paying for its impacts. Unfortunately, special interest groups, tax-and-spend politicians, and Major unwisely see the industry as a cash cow for unsustainable statewide projects. People should not lose out to bad policy and the politics of fear.