Rob Gleason has a predictably weak retort to Allyson Schwartz’s muscular severance tax plan:
The plan drew immediate criticism from Mr. Corbett’s allies in the state Republican Party.
“Pennsylvanians don’t want to move backwards and they already know we can’t tax our way to prosperity,” Robert Gleason, the GOP’s state chairman, said in a statement.
“Rep. Allyson Schwartz’ plan shows how out of touch she is with Pennsylvanians because she obviously doesn’t care about the 200,000 family-sustaining jobs the natural gas industry supports and would like to see them move to another state.”
The Gleason statement also attempted to tie Ms. Schwartz to the Democratic State Committee’s recent vote calling for a moratorium on gas fracking in the state. But speaking to reporters earlier, the congresswoman reiterated her opposition to the party official’s vote, a pro-drilling position, that with qualifications, is shared by the other major contenders for the Democratic nomination.
If anybody wants an explanation of why the economic story Gleason is telling is dead wrong I’ll be happy to get into it in the comments.
To show why he’s wrong I think it’s sufficient to point out that Gleason’s statement is contested by the gas companies themselves.
Natural gas company representatives straight up told Mike Sturla’s committee that they wouldn’t think about leaving the state even with a tax rate 1% higher than the current highest state:
Rep. Michael Sturla of Lancaster County said industry leaders have, during testimony in front of his committee, said they would not leave Pennsylvania even if the state’s fracking tax is 1 percent higher than the highest gas drilling tax in the country.
“Frankly, they have been more forthcoming than some of our politicians who have said (the industry) would leave,” Sturla said. “I don’t think it’s the industry that’s the bad guy. It’s other people who are standing in the way.”
Sturla made the comment less than an hour after Gov. Tom Corbett told a Chamber of Commerce gathering just a few miles away at DeSales University that there “can’t be” a gas drilling tax in Pennsylvania, presumably repeating the theory that taxation will chase investment and jobs away.
And keep in mind these are industry statements so you know that’s a low ball. We could probably have a 10% severance tax rate and they wouldn’t leave. I don’t know where the Laffer curve is when you have a completely captive industry like this, but I think we should experiment until we find out.
(via James O’Toole)