FrackingTax Realities 4/5/12
The Columbus Dispatch praises Kasich’s proposal to increase the severance tax on gas and oil from fracking and use the revenue to reduce the income tax. The Dispatch gushes that giving people “a chance to hold on to more of their own tax dollars is the kind of real stimulus that can propel an economy.” Let’s test their enthusiasm. The income tax currently brings in approximately $8.3 billion dollars. Applying the Dispatch’s estimate that the severance tax “could reach” $500 million annually. If all of that money were expended in lowing the income tax rate, it would lower the rate by 6%. A taxpayer earning the median income of $47,358 pays $1,346 in state income tax, based on tax brackets and rates published by the Tax Department. A 6% tax cut would be equivalent to $80.76 or $1.55 a week. Boy, I can see how that extra $1.55 a week could really fuel an economic boom alright.—not. I’m afraid that I need a higher bribe than $1.55 a week to be happy about fracking in the middle of state parks with the dangers of poisoning the underground waters and the dangers of earthquakes from disposal of the wastes. But hey, maybe Kentucky will be dumb enough to let us dispose of our wastes in their wells since we were dumb enough to dispose of Pennsylvania’s in ours.