Gov. Ritter and others are supporting a ballot initiative to raise severance taxes on oil and gas extracted from Colorado. It's a $321 million tax hike, with most of the money going to higher education.
It's a clever move to go after oil companies, which aren't the most popular businesses these days. The idea appeals to the basest populism - 'Oil companies suck, and look! They have money! Let's take some!' That seems to be about the depth of reasoning behind the measure. That, and 'oh how we need the money.'
The measure enjoys some popularity among the diarists at Colorado Pols, and when I made some attempt to swim against the tide there I got this response-
Ignore Walter
He will be on this site (and all the others) until exactly Election Day and then will disappear. He is a paid flack for the anti campaign
That's daft enough to put on permanent display here.
Well Wally, maybe your uninformed comments, combined with your recent registration at Pols, earned that response. Try being respectful and make an intelligent comment next time. I'd like to know if, given the ridiculously low severance rates we have, there are any good reasons to oppose the increase. Can you give me one?
It's neither your nor my money, clown. Thanks for the lesson on decorum.
Sure it's our money. It's our oil. Or am I wrong on that count?
It's my oil if I drill for it, I suppose. I certainly don't claim ownership of everything inside the state boundaries, but then again I don't believe in collectivism. Others do.
The millions that Colorado taxpayers are paying to take care of the impacts from this industry, and to clean up after them, is our money. That's what bringing the severance tax in line with our neighboring states would do--reduce the subsidies that are currently being born on our backs.
Oliver, I'm skeptical of claims that the state is losing money on the current tax arrangement. But, for the sake of argument, if we accept that to be true, why does most of the money paid out go to higher education? Are oil and gas wells somehow hurting college campuses?
Forgive me for going with the most obvious explanation here - it's simply a money grab.
So the state's natural resources belonging to the people is collectivism? I thought it was the law.
What's surprising about collectivism encoded in law? It's the way of the world.
Face it - the Governor is simply asking the oil and gas companies to collect another $300 million from you and me! Nobody really thinks the companies are paying for this do they?
Your responses on the issue do nothing to clarify why you think this is not a good idea. Are you lazy? Do you only want to engage people who agree with you? If so, too bad.
Well, I've explained two reasons so far, let me repeat -
-There's no reason oil companies should pay this money. They aren't the cause of the costs most of the tax money will go to pay.
-It's a moral failing on our part to expect other people to give us their property just because we think we need the money.
I'll add one more. You've heard the saying that government wants to tax anything that moves, until it stops moving, and then subsidize it. Oil and gas companies are moving now, as in making good profits. Not so long ago they weren't moving, which is why they were 'subsidized' with a tax break. (which isn't really a subsidy, but that's a topic for another time)
It's pretty safe to say, judging from history, that the oil business won't be this strong forever. When the next bust hits this tax will make things worse, and it's terribly difficult to cut a tax after it's been in place for a while and people have grown dependent on the money.
rb, normally it's true that tax increases are just passed on to consumers, but the severence tax is different, because it's a percentage of the market price. Since oil and gas are traded on worldwide markets a local tax in Colorado won't do much to increase the global price. That's also one of the problems with the tax. When oil prices come down and oil companies can no longer afford to pay the tax they will be unable to pass the cost on to consumers, and will instead have to shut down production, starting with the lower producing wells.
They're paying flaks to oppose a tax hike? Zowie! Where do I sign up?
PS: Utah and, I believe, Texas have lower severance taxes than CO.
Man, I wish someone would pay me to oppose that misguided money grab. Unfortunately, I'll just have to stand on principle for free (in the same way that Walter is and has for years).
It's odd to me that someone might jump to the conclusion that you have to be paid to oppose their ideas.
"Big oil" is an easy target with gas and oil prices so high (witness all of the Democrat ads that I've seen running here locally that take such great pains to paint their opponents as slaves to the industry), but that doesn't make a money grab like this any more correct.
While the supporters are quick to see the supposed costs to the drilling, they rarely look to the fact that the growth in business has been a huge benefit to smaller cities throughout the state by providing jobs and economic booth that is rippling through the state. The benefit that they bring us is not purely in the dollars raked in by the state government, but in the people employed, the businesses that they stimulate (everything from construction to manufacturing to durable goods), and the service they provide by taking stuff out of the ground and making it useful for us all.
But in taking the side opposite certain clowns of your acquaintance, I'm obviously setting myself up to be seen as a paid shill of Big Oil and not merely a person with a different set of conclusions about the ethical nature of the taxes being proposed.
Cheers.