Share This Page

Dems' tax myth

| Sunday, April 13, 2014, 9:00 p.m.

The proposed Allegheny County lease to drill under Deer Lakes Park exposes the severance-tax myth that all the Democrat candidates for governor are clamoring for.

Under “Royalty Payments,” the proposed lease lists all post-production costs that the driller would be able deduct from royalties paid to the county. One allowable deduction listed is a severance tax or “any tax imposed by any government body that is levied upon the value of production ... .” Translation: Any severance tax on the hugely profitable gas companies will be merely passed on in the form of reduced royalty payments to the county and, by extension, to every landowner/lessor (mostly farmers) in Pennsylvania.

This is outrageous because landowners' gas royalties have already been decimated (by up to 80 percent in Bradford County) since the state Supreme Court allowed all post-production costs to be deducted from royalties in its extremely controversial 2010 Kilmer v. Elexco decision, which also gutted the 12.5-percent-minimum provision of the state's 1979 Guaranteed Minimum Royalty Act. To the contrary, Gov. Corbett's impact fee on drillers is a direct cost of producing an unconventional well and cannot be passed on to the landowner/lessor as a post-production or post-wellhead tax.

Gerald S. Schiller

Frazer

TribLIVE commenting policy

You are solely responsible for your comments and by using TribLive.com you agree to our Terms of Service.

We moderate comments. Our goal is to provide substantive commentary for a general readership. By screening submissions, we provide a space where readers can share intelligent and informed commentary that enhances the quality of our news and information.

While most comments will be posted if they are on-topic and not abusive, moderating decisions are subjective. We will make them as carefully and consistently as we can. Because of the volume of reader comments, we cannot review individual moderation decisions with readers.

We value thoughtful comments representing a range of views that make their point quickly and politely. We make an effort to protect discussions from repeated comments either by the same reader or different readers

We follow the same standards for taste as the daily newspaper. A few things we won't tolerate: personal attacks, obscenity, vulgarity, profanity (including expletives and letters followed by dashes), commercial promotion, impersonations, incoherence, proselytizing and SHOUTING. Don't include URLs to Web sites.

We do not edit comments. They are either approved or deleted. We reserve the right to edit a comment that is quoted or excerpted in an article. In this case, we may fix spelling and punctuation.

We welcome strong opinions and criticism of our work, but we don't want comments to become bogged down with discussions of our policies and we will moderate accordingly.

We appreciate it when readers and people quoted in articles or blog posts point out errors of fact or emphasis and will investigate all assertions. But these suggestions should be sent via e-mail. To avoid distracting other readers, we won't publish comments that suggest a correction. Instead, corrections will be made in a blog post or in an article.