Don’t ex­pand sev­er­ance taxes

The Denver Post - - OPINION - Re: Peter Dom­browski,

“Sev­er­ance taxes need an up­date,” Dec. 8 let­ter to the edi­tor.

Let­ter-writer Robert Bray­den ar­gues that sev­er­ance taxes should be ap­plied to re­new­able en­ergy re­source pro­duc­tion, to be “fair” to the oil and gas in­dus­try. But he is con­fus­ing an ex­trac­tion tax with a con­sump­tion tax. Sev­er­ance taxes are levied when some­one is re­mov­ing (“sev­er­ing”) a fi­nite nat­u­ral re­source from the land. In fact, sev­eral states, in­clud­ing Colorado, have cre­ated sev­er­ance tax-funded en­dow­ments specif­i­cally so that rev­enue will con­tinue to flow even af­ter the re­source is ex­hausted. Fur­ther, since the lum­ber in­dus­try also pays sev­er­ance taxes, Bray­den’s logic would sug­gest that, in the in­ter­est of be­ing “fair,” new taxes should be ap­plied on tech­nolo­gies that com­pete with lum­ber (con­crete? steel? Trex?).

Con­sumers of re­new­able en­ergy should en­joy all of the fi­nan­cial ben­e­fits in­her­ent in that tech­nol­ogy, in­clud­ing the ab­sence of sev­er­ance taxes.

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