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Author Topic: Kasich 6.5% Severence Tax  (Read 5383 times)

macal

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Kasich 6.5% Severence Tax
« on: February 03, 2015, 07:12:20 PM »

   Did I read that right. Kasich calls for a 6.5% severence tax in Ohio. Probably more of a political move knowing that it won't happen but get help in the 2016 presidential election when he runs as Jeb's VP.
 The Republicans need Florida and Ohio to win. Both popular governors.

Rockdale

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Re: Kasich 6.5% Severence Tax
« Reply #1 on: February 04, 2015, 06:43:33 AM »
If it were to be enacted a tax hike of that magnitude on the oil and gas industry is probably unprecedented.  Apparently Governor Kasich is also proposing a severance tax of 4.5% on the liquid components.  Presently Ohio has probably the lowest tax rates of any state where oil and gas are significant industries.  Presently the effective severance tax on Ohio natural gas production is about 1.5%, a fraction of a percent lower than the effective tax rate in Pennsylvania which comes from the impact fee.  Interestingly while Governor Kasich wants to raise taxes on the oil and gas industry which are quite likely to be passed on in part to the land owners collecting royalties he is proposing tax cuts for others all at a time when the state is running an overall deficit.

macal

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Re: Kasich 6.5% Severence Tax
« Reply #2 on: February 04, 2015, 06:51:56 PM »

   6.5%. Is Ohio in worse financial shape than PA ?

macal

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Re: Kasich 6.5% Severence Tax
« Reply #3 on: February 04, 2015, 07:05:18 PM »

  Hey Wax. No one wants to touch this Kasich tax issue. 6.5%. Grover is not going to like it.

Rockdale

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Re: Kasich 6.5% Severence Tax
« Reply #4 on: February 05, 2015, 07:23:12 AM »

   6.5%. Is Ohio in worse financial shape than PA ?
>>>>> No, by published reports their budget deficit is around 500 million dollars vs. 2 billion in Pennsylvania.  Pennsylvania and Ohio are quite similar in population and per capita incomes so their situations are fairly comparable.  Ohio got hit very hard in the Great Recession as so much of their industrial base was shut down for good, and even though Ohio home values didn't soar during the real estate boom of 2002 to 2006, they took a dive when the recession started and have never fully recovered.  So it is surprising that a Republican Governor should look to impose punishingly high taxes on the one dynamic sector of the state's economy.  Reading a bit on this subject it would appear that Kasich is trying to win popularity with the voters by slashing state income tax rates, the broadest and probably most fairly imposed tax, and replacing the lost revenue from selected targeted sectors, in this case the energy industry.

macal

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Re: Kasich 6.5% Severence Tax
« Reply #5 on: February 17, 2015, 05:14:15 AM »

   The knives are coming out for Kasich from his own party and especially the gascos.

Rockdale

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Re: Kasich 6.5% Severence Tax
« Reply #6 on: February 17, 2015, 06:58:44 AM »

   The knives are coming out for Kasich from his own party and especially the gascos.
>>>> It is a very safe bet that the oil and gas industry in Ohio is going to be bitterly opposed to Governor Kasich's plan to quadruple taxes on gas production.  They've made billions of dollars of investments in wells and pipelines in just a few years in order to develop a portion of the Utica Shale and a much higher tax would definitely reduce the value of those investments.  But as to Republican politics in Ohio I think Kasich has his own reasons to attempt this maneuver of sharply higher severance taxes.  Ohio like most states has a personal income tax.  And looking at the tax tables it is readily apparent that Ohio's state income taxes fall much heavier on the more affluent because they are graduated unlike the state income tax in Pennsylvania which is a flat rate for all income groups.  The Republican Party is generally the party that likes to lower taxes if it can, and the form of taxation they appear to be most opposed to is the income tax.  Kasich has already gotten the legislature to lower the state income tax rates, and he apparently would like to use a big portion of the added revenue from a steep severance tax to cut rates a good deal more.

Wax

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Re: Kasich 6.5% Severence Tax
« Reply #7 on: February 17, 2015, 07:07:11 AM »

   The knives are coming out for Kasich from his own party and especially the gascos.
He also plans on cutting taxes for the wealthy and raising them on the poor. Now, that is a Republican. slaplaugh He is insistent on the gas tax and it well go UP.

macal

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Re: Kasich 6.5% Severence Tax
« Reply #8 on: February 17, 2015, 07:35:38 AM »
That's the Republican way. Trickle down. Read an interesting Will Rogers quote from the 30's. Talking about how they said the money would trickle down from the rich. He said it would it would trickle up even better . The rich would have it by the end of the day.

mohawk70

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Re: Kasich 6.5% Severence Tax
« Reply #9 on: February 17, 2015, 07:41:52 AM »
If you raise taxes on the rich, they will move out and take their wealth with them.   The governor of New Jersey, what's name, has been complaining about this continuously.

So, they will not only not pay income taxes, but they also will no longer pay real estate taxes and estate/inheritance taxes.   

Nor will they pay sales taxes ... and etc.


If you raise taxes on the poor and / or the middle class, they will move out also.


If you raise taxes on the rich ENOUGH, they will take their companies and relocate their companies to more hospitable states or to countries with lower tax rates.

So, no more corporate income tax revenues.

AND, no more employees, so no more of the various and many taxes on corporate employees' incomes.


We have reached the point of diminishing returns.

 
Please remember:  The planet Earth is a VOLCANO.   You cannot "save" a volcano ... and volcanoes do not NEED to be saved.

Rockdale

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Re: Kasich 6.5% Severence Tax
« Reply #10 on: February 17, 2015, 08:04:25 AM »
Mohawk, by your theory the state of Ohio if it would adapt the Kasich program should prosper mightily since Ohio will become more attractive to the wealthy than it is now.  Mr. Kasich's new alignment of taxes will definitely drop tax income tax rates, especially on those with higher incomes.  The fly In the ointment is that in order to cut income tax rates Ohio will be going after its most dynamic sector, the oil and gas industry, with a meat axe.  And considering how adept the oil and gas industry is at shifting the burden of any increased taxation upon recipients of royalties I would think that a lot of Ohio land owners will find their income taxes sharply reduced because their royalty incomes will shrink to very little.

mohawk70

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Re: Kasich 6.5% Severence Tax
« Reply #11 on: February 17, 2015, 10:44:21 AM »
Mohawk, by your theory the state of Ohio if it would adapt the Kasich program should prosper mightily since Ohio will become more attractive to the wealthy than it is now.  Mr. Kasich's new alignment of taxes will definitely drop tax income tax rates, especially on those with higher incomes.  The fly In the ointment is that in order to cut income tax rates Ohio will be going after its most dynamic sector, the oil and gas industry, with a meat axe.  And considering how adept the oil and gas industry is at shifting the burden of any increased taxation upon recipients of royalties I would think that a lot of Ohio land owners will find their income taxes sharply reduced because their royalty incomes will shrink to very little.


As you know, the more you raise taxes, the more prosperous everyone becomes.

There is no limit to how prosperous you can tax yourself.

Please remember:  The planet Earth is a VOLCANO.   You cannot "save" a volcano ... and volcanoes do not NEED to be saved.

Rockdale

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Re: Kasich 6.5% Severence Tax
« Reply #12 on: February 17, 2015, 11:48:08 AM »
Mohawk, by your theory the state of Ohio if it would adapt the Kasich program should prosper mightily since Ohio will become more attractive to the wealthy than it is now.  Mr. Kasich's new alignment of taxes will definitely drop tax income tax rates, especially on those with higher incomes.  The fly In the ointment is that in order to cut income tax rates Ohio will be going after its most dynamic sector, the oil and gas industry, with a meat axe.  And considering how adept the oil and gas industry is at shifting the burden of any increased taxation upon recipients of royalties I would think that a lot of Ohio land owners will find their income taxes sharply reduced because their royalty incomes will shrink to very little.


As you know, the more you raise taxes, the more prosperous everyone becomes.

There is no limit to how prosperous you can tax yourself.
>>> Mohawk, in the real world governments are going to impose taxes.  The only question is how much they will tax and in what form those taxes will be levied.  My personal preference is towards a tax that is based largely on ability to pay.  Which is why I would prefer a graduated income tax over an older form of taxation such as the heavy excise taxes that used to be levied at the time of British rule over colonial America which helped to set off the Revolution.  If you would prefer a tax such as Governor Kasich's proposal to tax the living daylights out of natural gas drilling I guess that is your privilege.

mohawk70

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Re: Kasich 6.5% Severence Tax
« Reply #13 on: February 17, 2015, 02:02:16 PM »
Here is a helpful brief knowledgable discussion from the current  Shale Directories


http://www.shaledirectories.com/news/Facts-Rumors-133-February-14-2015


 
PA Governor Wolf’s tax plan. 

Wolf's proposal mirrors West Virginia's gas levy: a 5 percent tax on the value of natural gas produced from a well and a 4.7-cent fee for every 1,000 cubic feet of gas extracted.

It’s really not a 5% percent tax.  When you add the fees it’s 8.4% in Northeastern PA and a 7% in Southwestern PA.  The tax rate is being distorted.

Marcellus Shale Coalition statement following Governor Wolf’s tax proposal. 

Marcellus Shale Coalition president David Spigelmyer issued the following statement on Governor Wolf’s new energy tax proposal unveiled today in Thorndale, Pennsylvania:

“Governor Wolf fails to acknowledge that the natural gas industry already pays significant taxes in Pennsylvania. Natural gas operators pay the same taxes that every other business in Pennsylvania pays, which have helped generate more than $2.1 billion through 2013.  Pennsylvania is the only state that imposes a special impact tax that will have generated nearly $830 million by April of this year, directly benefitting all 67 counties throughout the Commonwealth.  Pennsylvanians have realized more than $700 million in royalties from energy-development on public lands. By any measure, these are significant revenues that are boosting local communities, as well as important environmental programs.  More importantly, revenue estimates fail to account for the more than 200,000 hard-working Pennsylvanians who are employed by or support this industry and generate substantial revenue for the Commonwealth by paying their taxes.”

“While we look forward to evaluating the policy details outlined by the Governor today, it’s clear that new energy taxes will discourage capital investment into the commonwealth and make Pennsylvania less competitive. Make no mistake, adding a five percent tax to any business sector – including the energy industry – is going to reduce capital spending and hit the supply chain, especially Pennsylvania-based small and mid-sized businesses, as well as our region’s labor and building trades.”

“Pennsylvanians are looking to their elected officials to help create new jobs, not new taxes, especially during these difficult and challenging times within an industry that has reduced energy costs for every consumer and been a bright spot for the Commonwealth’s economy.”

 
« Last Edit: February 17, 2015, 02:05:57 PM by mohawk70 »
Please remember:  The planet Earth is a VOLCANO.   You cannot "save" a volcano ... and volcanoes do not NEED to be saved.

 


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