No Severance Tax Increase

Curtis Coleman, The New South Conservative: It’s not a secret that Arkansas has struggled to attract major new businesses to our State. Deserved or not, the State of Arkansas has the reputation for penalizing successful businesses with higher taxes and tougher, more expensive regulations. Which is exactly what we may be about to do to one to Arkansas’s most successful new industries.

Arkansas’s natural gas industry has been an unmistakable financial bonanza for the State of Arkansas…hundreds of good-paying jobs, new wealth for thousands of Arkansans, not to mention tens of thousands of new tax revenue dollars for the State.

But some in our state are pushing for us to live up to our reputation for penalizing our successful industries with higher taxes and more expensive regulatory hurdles. This time, it’s in the form of something called higher severance taxes on natural gas produced from Arkansas’s thousands of natural gas wells.

There’s never a good time for a higher tax. Higher taxes suppress wealth creation, reduce job availability and increase unemployment, discourage business expansion and shrink the tax base for the State. A higher severance tax may produce more tax revenues on some natural gas wells in Arkansas, but it will increase the cost of production – which has the inevitable result of reducing the number of wells under production. The end result is fewer wells, decreased production, a smaller tax base, and ultimately lower tax revenues – eventually leading to a demand for even higher taxes.

Arkansas already has one of the highest tax burdens in the Nation…which means that taxpaying Arkansas pay more for the State government services they receive than more than 87% of the rest of the country. The last thing Arkansas needs to do now is raise taxes! Arkansas needs to create more tax payers, not higher taxes!

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