Taxation

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    Latest Tax Marcellus Bill from Rep Tina Davis: Effective Rate of 11%

    It’s another day, must be time for another liberal Pennsylvania Democrat to propose taxing the the Marcellus industry into oblivion, and right on cue PA Rep. Tina Davis (Bucks County, near Philadelphia) has introduced one. Her plan goes well beyond the plan offered earlier this week by PA Gov. Tom Wolf. Wolf’s plan is for a 7.5% tax, that taken with the existing state corporate income tax pushes an effective severance tax rate to well over 10%. That’s not enough for the tax ravenous Tina Davis: She not only wants a 5.2% severance tax with 4.6 cents per Mcf (effective rate of maybe 8% total), she wants to keep the current impact fee, which is another 3% (not the 1.9% claimed), creating an effective rate of somewhere around 11%. Let’s just save the Dems some time: Tax the Marcellus industry 99% and let those money-grubbing corporations keep 1%. That’s what PA Dems really want. What’s that? You say not all money earned by corporations (and citizens) belongs to the government? You silly goose. Of course it all belongs to the state…
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    PA Gov Wolf Proposes Marcellus-Killing 7.5% Severance Tax

    taxes go up - jobs go downNewly elected Pennsylvania Gov. Tom Wolf has turned out to be another tax and spend liberal. Surprise! If you’re a regular MDN reader, you’re not surprised. We warned you about this from day one. Wolf released his severance tax plan yesterday, and it’s even worse than what he talked about on the campaign trail. He’s proposing a 5% severance tax PLUS another 4.7 cents per thousand cubic feet of natural gas that flows from a well. PA’s House Majority Leader Dave Reed (Republican) says it works out to be roughly a 7.5% tax–one of the HIGHEST IN THE NATION. On top of low low gas prices and rigs beginning to idle and capital budgets slashed 30-50%. In other words, if this tax is passed, not only will it not bring in Wolf’s disingenuous promise of $1 billion “for the children” (i.e. teachers unions), it will KILL Marcellus drilling in the state–and that’s not a bluff. It’s now apparent that Wolf is a man completely out of his depth and not ready for a big job like governor…
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    PA Towns to Gov Wolf: Don’t Kill the Impact Fee with Your New Tax

    Yesterday Pennsylvania Gov. Tom Wolf (Democrat) proposed what amounts to a 7.5% severance tax on Marcellus and Utica Shale drilling in the state (see our lead story today). Wolf’s severance tax is being erroneously reported as a 5% severance tax PLUS 4.7 cents per thousand cubic feet of natural gas produced at the wellhead. When you work it out, it’s actually about 7.5%, NOT 5% as Wolf misleadingly implies. Coupled with PA’s high corporate income tax rate, the proposal, if passed, would put PA at the top of the list of states taxing the oil and gas industry, essentially killing future Marcellus Shale drilling in the state (not an idle threat). Some of those most opposed to this hare-brained plan are the townships where drilling actually happens–they stand to loose big-time because the impact fee money they get now will be traded away for a few table scraps. The impact fee will be converted into the severance tax–and given away to Philadelphia…
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    John Quigley’s Old Employer Likes High Wolf’s Marcellus-Killing Tax

    MDN has several stories today about the newly proposed 7.5% severance tax on Marcellus Shale drilling proffered by newly-elected Pennsylvania Gov. Tom Wolf. If you want to know whether or not this severance tax will work to undermine, and even stop, Marcellus Shale drilling, all you have to do is look at the comments of anti-drilling groups in the state–like the comments of the radical PennFuture. You may recall that Wolf’s nominee to head the Dept. of Environmental Protection, John Quigley, used to work for PennFuture (what does that tell you about the future of drilling in the state?). According to the new “acting” CEO and head of PennFuture, this severance tax will help to end Marcellus Shale drilling in the state…
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    Philly State Senators Want to Slap Marcellus Industry with 9.9% Tax

    are you on drugs?We seriously wonder if some of the legislators that serve in the Pennsylvania State Legislature are on drugs. Seriously. What else can explain comments like those from Pennsylvania State Senator Vincent Hughes (Democrat from Philadelphia) in saying the Marcellus Shale industry currently pays no taxes, that the drilling industry is making PA children “suffer,” and he thinks the industry should be hit with a new 8% severance tax PLUS another 1.9% impact fee. It’s absolutely mind-blowing–like psychedelic mind blowing. Does Hughes live in an alternate universe? Oh that’s right, he’s in the back pocket of teacher$’ union$ and is $imply their tool…
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    PA High Tax Game Plan: Keep Impact Fee, Add Severance Tax To It!

    Here’s how tax-devouring Democrats and RINOs in Pennsylvania plan to pass a Marcellus-killing severance tax: Step 1: Keep the impact fee (which is really a tax) in place, which amounts to the revenue that a 2% 3.2% severance tax would raise. Never mind the state’s corporate income tax more than makes up the other 3% of a proposed 5% severance tax. The media, and politicians, intentionally ignore that inconvenient truth. [UPDATE: MDN has it from a highly-placed and trustworthy source that impact fees now being paid by drillers are actually closer to a 3.2% severance tax, not 2% as we previously noted.] Step 2: Introduce a severance tax bill of 3.2% severance tax bill, offered as a “compromise” that lets local communities keep their 60% of the impact fee, but steals money from landowners and drillers (the other 3.2%) to give to teachers’ unions, feeding the beast to keep it at bay (and to pay back a campaign debt). Step 3: After a year or two, when it’s apparent that Harrisburg’s continuing out-of-control spending hasn’t been reigned in and drilling slows down so there’s less tax revenue coming in, just goose the 3.2% tax all the way up to 5% or higher. That’s the plan of Reps. Gene DiGirolamo, R-Bensalem; Tom Murt, R-Hatboro; Harry Readshaw, D-Pittsburgh; and Pam DeLissio, D-Philadelphia as they introduce their “fair and reasonable” 3.2% severance tax bill…
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    OH Gov. Kasich Increases Proposed Severance Tax Rate by 236%

    tax increaseIt now appears Ohio Gov. John Kasich (RINO), wants to completely kill Utica Shale drilling. On Monday he released his latest budget and his severance tax proposal has gone from his previously preferred rate of 2.75% to an astonishing 6.5%–a 236% increase. Yes, you read that right–it’s not a typo. Over the past several years, Kasich has squabbled with his own Republican legislature over how much of (not if) an increase there should be. The legislature proposed 2.25% as a new severance tax rate, Kasich wanted 2.75%. Eventually the legislature proposed a compromise at 2.5% (see OH Repubs Sell Out on Severance Tax, Kasich Wants Even More!). Kasich dearly wanted that extra 0.25% and held out, losing the battle. There was no increase passed. Kasich, whom we refer to as “the foreigner hunter” for his jingoistic disdain for “foreign” oil and gas workers from exotic places like Texas and Oklahoma, has just upped the ante considerably with a proposed 6.5% severance tax. Did Ohio just become Colorado and is Kasich now smoking pot?…
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    PA Towns Don’t Like Gov. Wolf’s Severance Tax Plan

    As newly enthroned PA Gov. Tom Wolf considers his misguided attempt at ramming through a Marcellus Shale-killing severance tax, he better talk to PA’s townships–all of which receive at least some money from the current impact fee. If the state suddenly yanks away impact fee revenue from those towns, many of which rely on that money in their annual budgets, Moody’s Investors Service says such an event will be “a credit negative” for those local governments. In other words, you can expect a Moody’s downgrade–making any bonds issued by PA towns more expensive, requiring more taxpayer money to pay back…
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    The Tax Man Returneth — for PA Landowners with Royalties

    Landowners who get royalty checks in Pennsylvania beware: the PA tax man may be coming for you. It’s a shame, but landowners who get royalty checks have to employ a bevy of accountants and tax experts in order to file a tax return. Such is life. One of the deductions landowners take from their royalty checks are for production costs. On paper, a landowner may be paid 14% in royalties, but in actuality it works out to be much less. Landowners have to navigate sometimes confusing statements from drillers to put the right numbers in the right boxes. What’s happening now is that the PA Dept. of Revenue is telling some landowners the numbers in the boxes don’t add up–according to their convoluted calculations anyway. And PA wants some of that money back they say should have been paid to them all along. It’s a confusing mess…
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    Let’s Slap 5% Tax on ALL PA Natural Resources, Not Just Shale Gas

    One of Pennsylvania’s top conservative (Republican) strategists and consultants, Charlie Gerow, offers up a sobering picture of the hard work ahead for liberal/leftist Gov.-Elect Tom Wolf when, on Wednesday, he assumes office and we drop the “-Elect” part in his title. Gerow points out that Wolf got elected by offering few specifics about his plans to raise taxes, except for a tax on the Marcellus Shale–he was crystal clear on that. When Wolf assumes office on Wednesday, all of his campaign prevaricating comes to an end and he will have to start offering real proposals for big problems. Gerow evaluates the prospects for a Wolf severance tax on Marcellus Shale gas this way:
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    OH Anti-Drillers Propose Taxing Gas in Interstate Pipelines

    Anti-drillers looking to a) stop shale drilling in Ohio and b) barring that, slow it down by taxing the #$@% of out the industry, met with a couple of members of RINO Gov. John Kasich’s staff last Friday to present what they hoped would be a proposal Kasich’s socialist-high-taxing nature would find appealing: tax natural gas flowing through interstate pipelines in Ohio. No word from the staffers whether or not they found merit in the proposal by the Ohio division of Citizens Against the Nexus/?Spectra Pipeline…
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    PA Sen Brewster’s “Excrement for Education” Severance Tax Bill

    Pennsylvania State Sen. Jim Brewster (Democrat from Allegheny & Westomoreland counties) wants to be known as the politician that killed Marcellus drilling in the Keystone State. That’s the only thing we can conclude from his efforts to introduce (yet again) a bill that would tax Marcellus drilling into idleness. Brewster’s plan calls for KEEPING the impact fee and ADDING a severance tax to it–but deducting impact fee payments from the severance tax. Complicated cockamamie? Yeah. Brewster proudly calls his bill/plan “Extraction for Education” because it will give all of the severance portion raised (5% or whatever portion it works out after impact fees) to teachers’ unions. We call it “Excrement for Education”…
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    PA Senators to Re-Introduce Impact Fee Bill for Pipelines

    Two Philadelphia-area state senators, John Rafferty (Republican from Collegeville), and Andrew Dinniman (Democcrat from West Chester), will introduce legislation in January that would extend the Act 13 impact fee to include newly built gathering and transmission pipelines in the state. The new fee/tax would be based on the amount of acreage used by the pipeline, which includes the entire right-of-way on either side of the pipeline. According to the senators, most of the revenue generated would stay with the local counties and towns where the pipeline is located, in keeping with the intent of an impact fee. The industry is pushing back, saying pipelines have a minimal impact…
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    Big Education Political Contributions Dwarf Marcellus Spending

    The far-left (and partisan) Common Cause PA, along with the co-opted-by-the-left Conservation Voters of Pennsylvania, issued a “report” in November that claims the Marcellus drilling industry has spent upwards of $49 million on lobbying and political contributions in the Keystone State since 2007 ($8 in contributions to political campaigns, $41 spent on so-called “lobbying”). What these two partisan groups don’t tell you is that Big Education and Big Government (teacher and government employee unions) spent $71 million on campaign contributions and lobbying over the same period of time–much of it money paid by taxpayers. Convenient how they leave that little fact out, isn’t it?…
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    PA Accountants Love Marcellus Severance Tax (and Smoking Pot)

    Two accountants walk into a bar….Wait! No. That’s a story for another blog site. Reboot: The Pennsylvania Institute of Certified Public Accountants (PICPA) has just released a poll of their members. One of the questions asked: How should PA close the state budget gap? The top three choices from the bean counters: (1) privatize liquor stores (69%); (2) implement a severance tax on shale drilling (67%); and (3) legalize pot smoking (27%). There are 22,000 members of PICPA, so if 22% of them (almost 5,000) want to light up a joint, it looks like more than a few in PA believe like John Hanger, Gov.-elect Wolf’s new Secretary of Planning and Policy. Before Hanger dropped out of the governor’s race, he famously endorsed legalizing pot smoking. Maybe PA will become the new Colorado–full of stoners? But we digress. Does anyone else find it suspicious that the people who would have to file reams of tax forms on a severance tax (generating lots of billable hours) are in favor of such a tax? Can anyone say, conflict of interest?…
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    PA Gov-Elect Wolf Appoints John Hanger Secretary of High Taxes

    Pennsylvania Gov.-elect Tom Wolf continues to get the Ed Rendell band back together again–the same bunch that ran PA into the financial ditch under Rendell. First he appointed Katie McGinty, former Secretary of the Dept. of Environmental Protection (DEP) under Rendell, as his chief of staff. Now Wolf has appointed another Rendell Sec. of DEP, John Hanger, as his Secretary of Planning and Policy. Must be Wolf has a thing for DEP Secretaries. You may recall Hanger ran against Wolf (and against McGinty) in the Democrat primary for governor this year, but dropped out in March (see Pass One Last Joint for John Hanger). Hanger can’t wait to cook up high severance taxes on drillers. Why is it Democrats always salivate when they think about taking other people’s money?…
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