Taxation

MDN has previously reported on efforts in Pennsylvania to substitute a so-called “gross receipts tax” (GRT) on natural gas for a severance tax as a way to raise millions of dollars for Democrats’ voracious appetite to spend money (see Ploy to Rename PA Severance Tax as “Gross Receipts” Tax and More on PA’s Potential Gross Receipts Tax on NatGas). A GRT taxes the use of natural gas, instead of the production. LibDems would have you believe Big Oil companies and Big Utility companies will bear the brunt of such a tax. Not so. As the Commonwealth Foundation lays out in a recent post, the brunt of such a tax would be borne by low-income families who heat their homes with natural gas. People who heat with natural gas will end up paying the tax because taxes are always paid by consumers and not corporations (the costs are ALWAYS passed on). Here’s a look at how the little guy will get screwed once again if the Dems in PA get their way…
Read More “Proposed NatGas Gross Receipts Tax Targets PA Low-Income Earners”

Pennsylvania legislators went home for the long Fourth of July holiday weekend without a final budget in place. The clock is ticking. The spending part of the budget–some $31.5 billion (a massive amount) has been agreed to by both the Republican-controlled legislature and Democrat Gov. Tom Wolf. However, the budget needs to find another $1.5 billion to fund it–the shortfall in the current plan. Wolf wants “sustainable revenue”–by which he means permanent tax increases on something. Wolf’s preference is to slap a Marcellus Shale-killing severance tax on the natural gas industry. That’s a non-starter for the Republican-controlled legislature–people who actually know how economics work. It does appear the two sides are close to getting the budget passed. This week should tell the tale of how the state plans to raise enough money to bridge the shortfall…
Read More “PA Budget Battle Continues, Marcellus Severance Tax Off the Table”

Last Friday MDN told you about the latest plan to tax Pennsylvania natural gas–something called a gross receipts tax (see Ploy to Rename PA Severance Tax as “Gross Receipts” Tax). We now have a bit more detail on what that plan is. A gross receipts tax is nothing more than a sales tax that would be assessed on users of natural gas. It’s meant to transfer wealth from those who use natural gas into the pockets of Big Education (i.e. teachers unions), the same way a severance tax was meant to do. There is an important difference between a gross receipts and a severance tax. A severance tax would tax all natgas coming out of the ground. A gross receipts tax would tax only that gas sold and used in Pennsylvania–by end users (consumers, businesses, power companies, etc.). So the gas that gets shipped out of state wouldn’t be taxed. And therein lies the rub. Not only is Wolf & co. trying to use a shell game to move the tax around and make it appear that it’s not a tax on the drilling industry, their plan (we’re convinced) is to get this idiotic tax in place and then, next year or the year after, begin talking about how “unfair” it is that all of that gas going out of state isn’t taxed the way the gas is taxed in state–and “we have to close the loophole.” That’s how the game is played by tax & spend liberals like Wolf. Our advice to GOP legislators: JUST SAY NO. PA has a spending problem–not a taxing problem. Here’s the latest on the gross receipts tax idea…
Read More “More on PA’s Potential Gross Receipts Tax on NatGas”

Democrats just love to help themselves to OPM–other people’s money. They have a spending habit the equivalent of a crack junkie. Ever notice how junkies use very creative ways to try and feed the habit? One of their favorite tactics is to euphemize–call the same thing by a different name. In Pennsylvania, big-spending Dems in the legislature, along with their big-spending governor, Tom Wolf, are at it again. A severance tax is a tax on natural gas as it comes out of the ground–“at the wellhead.” You measure what comes out and you tax it. Another way to tax the same thing is called a “gross receipts tax”–which taxes the value the gas was sold for. In essence, a gross receipts tax is a sales tax. The price of the underlying good being sold goes up–so does the tax (it’s a percentage of the sales price). At the end of the day, a tax is a tax is a tax. You can call it a severance tax, or you can call it a gross receipts tax–it’s the same thing: a tax. Because Dems have short-term memory issues, we’ll remind the Dems reading this that Marcellus gas is ALREADY TAXED–by two different taxes: an impact fee and corporate income tax (on profits). PA is already paying the equivalent of a very healthy severance (or gross receipts) tax. But all the Dems can see are big dollar signs–that a gross receipts tax could raise $500 million per year or more–to feed their enormous big spending habit…
Read More “Ploy to Rename PA Severance Tax as “Gross Receipts” Tax”

Last year Pennsylvania Gov. Tom Wolf thought he could win in a game of “chicken” with Republican majorities in both the PA House and Senate. Wolf tried to ram down their throats a number of tax increases–including a raise in the personal income tax, sales tax, cigarette tax, severance tax–just about any tax you can think of. Wolf lost. The budget was a disaster because he wouldn’t negotiate, wouldn’t compromise, wouldn’t do anything. He was banking on a liberal media to come to his support. In the end, even the media abandoned him as a hardheaded putz. This year Wolf is singing a different tune. He’s not demanding higher taxes and enormously bloated spending increases across the board. However, Wolf is still obstinately insisting on a Marcellus Shale severance tax–even though the industry is on the ropes and in survival mode. Just when we thought he was wising up…
Read More “PA Budget Progress – But Wolf Still Insists on Severance Tax”

Yesterday the Pennsylvania Public Utility Commission (PUC), the agency charged with keeping tabs on impact fee revenue from shale drillers, announced that impact fee revenue (PA’s version of a severance tax) is going down by $36 million from fees levied in the previous year–to $188 million. That’s the lowest yearly impact fee revenue in the past five years–since the beginning of impact fees in PA. As an aside, we find it interesting that last year when impact revenue was the highest it’s been in five years, the PUC had to be forced to release the numbers, with Republicans leaking the numbers first to force the PUC to give it up (see PA 2014 Impact Fee Payments: List of Drillers & What They Paid). This year, when impact fee revenues are at their (current) lowest levels, the PUC is only too happy to trumpet the news. Tell us again how politics, and lib Dem appointments, don’t play a role at the PUC. Anywho, below we have the johnny-on-the-spot-let’s-get-the-news-out-quickly press release from the PUC, followed by some pretty, colored charts detailing who paid, and where the money will go, for PA’s 2015 impact fees…
Read More “PA PUC Releases Impact Fee Numbers: Revenue Down $36M in 2015”

Pittsburgh, PA has two major newspapers–the Post-Gazette and the Tribune-Review. We’re talking general interest newspapers. There’s also the Pittsburgh Business Times, a great paper but niche and focused on business only. Of the two general interest newspapers, the Post-Gazette is obviously owned and operated by liberal Democrats. They tilt somewhere left of Vlad Putin on the editorial page. The Tribune-Review, however, is a balanced paper and not beholden to the Democrat machine in PA the way their rival is. There’s no better way to illustrate that then the Post-Gazette’s love and adoration of current Dem Gov. Tom Wolf and his proposed punitive taxes the Marcellus Shale industry. The Post-Gazette LOVES Wolf’s idea for a severance tax and berates the gas industry for not “doing its part.” The Tribune-Review, on the other hand, takes a more balanced approach. In a recent editorial, the Tribune-Review points out Wolf’s latest severance tax proposal, if passed, would be the highest in the nation. They also point out Wolf’s income tax increase and minimum wage proposal would decimate the state economically…
Read More “Pittsburgh Paper Roasts Wolf Over Sky-High Severance Tax Proposal”

Not only is PA’s Gov. Wolf stubborn, he’s stupid too. Dangerously so. Wolf and those he has surrounded himself with are hellbent on enacting a severance tax on the Marcellus industry in the state, as a way of paying back teachers’ unions for their support of him in the last election. Wolf, with the aid of willing liars in mainstream media, continuously repeat the same lie: PA is the only oil and gas state without a severance tax. They intentionally ignore the impact fee and corporate income tax on drillers in PA that together adds up to about the same rate of taxation as a severance tax in states like Texas and Louisiana. For the second year running Wolf has proposed a severance tax–this time RAISING it to a supposed rate of 6.5%. Yes, the new tax would allow drillers to deduct whatever impact fees they would still have to pay. The state’s Independent Fiscal Office (IFO) has run the numbers and compared Wolf’s proposal to other states. You know what they found? Wolf’s proposed severance tax would have an effective rate of 8.5%, not 6.5%. It would be the highest such severance tax in the country! Some 54% higher than the effective severance tax rate in either Texas or Louisiana. So tell us, how many drillers will stick around PA and continue to drill with a tax like that? Can you say “ghost town”?…
Read More “IFO: PA Gov. Wolf Proposes Highest Severance Tax in Nation”

We just have to shake our heads. Did Pennsylvania Gov. Tom Wolf learn nothing in his first year in office? Does he not see that expanding taxes during the Obama recession is a recipe for disaster? Is cutting spending (for a Democrat like Wolf) congenitally impossible–like cutting off your own arm? Apparently all of the above is true. Even though we have the worst economy nationally (and in PA) in the past eight years, thanks to Obama and his policies; and even though the shale industry is still in free fall because of low prices (victims of our own success); and even though the default budget passed in PA without a huge increase in education spending for this past school year didn’t result in any “harm” being done to little kiddies; PA Gov. Tom Wolf and his budget lackey Randy Albright are once again out there promoting (i.e. demanding) huge tax increases in the budget due in June of this year. Wolf/Albright want to raise the personal income tax in PA, and (once again) take a run at instituting a Marcellus-killing severance tax, even though the state already has the FULL equivalent of a severance tax when you add corporate income taxes with the impact fee they now pay. Words escape us. It’s beyond insanity. Perhaps gross mismanagement and leadership malpractice?…
Read More “PA Gov. Wolf Promotes New Budget with (Yes) Severance Tax”

In the end, the recalcitrant and rabidly partisan Tom Wolf, governor of Pennsylvania, delayed his state’s budget for nine months…for nothing. He didn’t get his precious high Marcellus (or state income) tax hikes. He didn’t get pretty much anything he demanded. Like a petulant child stomping his feet and blaming every Republican he could find–in the end everyone saw Wolf for what he is: inept, inexperienced, and unprepared to govern the Keystone State. Like leadership-deficient people throughout history, he’s surrounded himself with suck-ups who won’t give him much-needed counsel that goes against his childish demands. They just tell him he’s right and to stick with it. Which has resulted in a disaster for PA. It was PA’s Democrats, in the end, that forced Wolf’s hand. Those in his own party. (Et tu, Brute?) PA’s Democrat legislators told Wolf if he didn’t allow the latest budget proposal to pass, they would vote with Republicans to override his threatened veto. And that would completely unmask him for the leaderless chump he is. So Wolf won’t veto the latest proposal–which contains no new taxes–allowing it to become law. Thank you to PA Republicans for standing firm and WINNING! The media can’t spin it, the Dems can’t spin it–Wolf lost and the Republicans won. Every citizen in PA is a winner because of it…
Read More “PA Gov. Wolf Caves on Budget Deal After 9 Mo. of Temper Tantrums”

Guess what’s just happened? The fiscal year for Pennsylvania is in its last four months. Republicans held firm against an out-of-control-spending governor, Tom Wolf, with no increase in income taxes and no new Marcellus severance tax. And schools went on as they always do. Teachers taught, students learned. The educational Holocaust didn’t happen without hundreds of millions of dollars being transferred from Marcellus drillers to teachers unions. And everything is just fine. Illustrating that Wolf lied about the need for a new/high severance tax. But don’t worry, Democrats are consistent if anything. Wolf is absolutely insisting on a 6.5% severance tax this year, instead of the 5% severance tax he wanted last year. He’s doubling down on the tax, even though it was just proved it’s not needed…
Read More “Education Doing Just Fine Without Marcellus Tax in PA”

What is it about elected “Republicans” in the Philadelphia orbit? Seems to us most of them are Republicans in Name Only (RINOs). One such elected RINO, PA House of Representatives member Kate Harper, R-61, is once again floating a severance tax plan. Her 3.5% tax plan sounds better (on the surface) than Democrat Gov. Tom Wolf’s 6.5% plan–except she also wants to keep the impact fee and not allow that fee to be deducted from the 3.5% tax she wants to raise for the teachers’ unions. At least Wolf allows impact fees to be deducted from his plan. The point is, Harper is completely bonkers. Out of her mind. Read today’s companion story about rig counts and how PA has been decimated. And she wants to slap a tax on production?…
Read More “PA RINO Rep. Kate Harper Trots Out Severance Tax, Again”