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Posted by: mturnipseed on 11/04/2009 07:35
Updated by: mturnipseed on 11/04/2009 07:35
Expires: 01/01/2014 12:00 Oil Severance Tax is a Bad Idea
November 4, 2009
Letter to the Editor
Bakersfield Californian
Re: “Old debate, new twist: Pitch to tax oil production comes up again” (November 3)
Editor:
A severance tax on California oil production was a bad idea when voters overwhelmingly rejected it a few years ago, it was a bad idea when the Legislature rejected it in previous sessions, and it’s a bad idea now.
November 4, 2009
Letter to the Editor
Bakersfield Californian
Re: “Old debate, new twist: Pitch to tax oil production comes up again” (November 3)
Editor:
A severance tax on California oil production was a bad idea when voters overwhelmingly rejected it a few years ago, it was a bad idea when the Legislature rejected it in previous sessions, and it’s a bad idea now.
Despite promoters’ protestations to the contrary, imposing billions of dollars in severance taxes will discourage in-state production, increase our reliance on foreign oil, drive gas prices higher and cost thousands of California working men and women their jobs.
Another fallacy surrounding the oil tax is the claim that we’re the only oil-producing state that doesn’t have one. What promoters fail to mention is that California imposes a plethora of taxes on oil production that other states don’t assess, so the aggregate is quite comparable. The new severance tax, however, would make California’s taxes on oil production far and away the highest in the US.
And does anyone really believe those billions in new taxes won’t be passed on to consumers, as promoters promise? As the state’s non-partisan Legislative Analyst concluded when a similar proposition went, unsuccessfully, before the voters in 2006, it would be difficult to enforce the prohibition on a pass-through due to the many factors that determine oil prices. Make no mistake – billions in new oil taxes will mean consumers will pay billions more at the pump, one way or another.
If lawmakers pursued fiscal responsibility with a fraction of the vigor with which they merchandise ill-conceived tax increases, they might be closer to solving California’s budget crisis.
Michael Turnipseed
Executive Director
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