Tags: Economic- Crisis | taxes | ohioo | kasich

Ohio Gov. Kasich's 'Frack Tax' Opposed by GOP Lawmakers

Friday, 16 Mar 2012 05:14 AM

By Sandy Fitzgerald

Ohio Republican Gov. John Kasich’s plan to cut the state’s income taxes by taxing shale drilling may face resistance from his own party. The “frack tax” revenue, which would offset the costs of an across-the-board income tax cut, is a key element of Kasich’s new policy proposals, reports the Columbus Dispatch.
The income tax cuts could begin at 1.6 percent in 2014 and grow to a 5 percent cut by 2017 —bringing in as much as $500 million yearly.
“I’m not sure the [Republican] caucus in the House is receptive to the recommendations on oil and gas that the governor has made,” said Rep. Peter Beck, a Republican who chairs the House Ways and Means Committee, which is considering the governor’s tax proposals.
Kasich’s plan calls for taxing crude oil and liquid natural gas from fracked wells, beginning at 1.5 percent of gross receipts and going up to 4 percent, all depending on when each drilling company recoups its start-up costs. Dry gas would also fall under Kasich’s tax plan, and would be charged at 1 percent.
However, Beck said the tax targets an industry that’s still developing, and Republican Sen. Tim Schaffer, who heads the Senate Ways and Means Committee, said while he’s “all about tax cuts,” he and the committee are not in favor of tax increases like the frack tax.
The new tax, if approved, could drive drilling companies away from Ohio, warns state Petroleum Council President Terry Fleming.
“Recent industry investments in Ohio are based on a tax and regulatory structure that was just put in place in 2010,” said Fleming. “Any change to that structure could drive away investment from the state, and send local jobs with them. It could also eliminate critical state revenues that come from current taxes on all gases and liquids extracted from the ground in the state.”
Kasich said he knows his plan might be blocked by politics, but “every Ohioan ought to benefit from this prosperity [from shale drilling], this wealth.”
Senate President Tom Niehaus, a Republican, said Ohio should get fair compensation for its natural resources, but said the state shouldn’t be anti-competitive with other states’ tax rates and discourage investment.
However, the Kasich administration said the proposed taxes are lower than rates charged in Michigan, Texas, North Dakota, and West Virginia.
Meanwhile, the state’s Democrats favor increasing taxes on shale drilling, but say an income-tax cut should not happen while schools and local governments are dealing with budget cuts.

© 2015 Newsmax. All rights reserved.

Around the Web
Join the Newsmax Community
Please review Community Guidelines before posting a comment.
>> Register to share your comments with the community.
>> Login if you are already a member.
blog comments powered by Disqus
Zip Code:
Privacy: We never share your email.
Hot Topics
Follow Newsmax
Like us
on Facebook
Follow us
on Twitter
Add us
on Google Plus
You May Also Like

Kentucky Senator Brandon Smith Wants Out of DUI With Immunity Law

Friday, 23 Jan 2015 19:20 PM

Kentucky state Senator Brandon Smith, arrested earlier this month on a DUI charge, is making an effort to get the charge . . .

School Bus Pentagram? Woman Outraged Over Satanic Brake Light Symbol

Friday, 23 Jan 2015 18:53 PM

A Tennessee woman is outraged after spotting what she says is a satanic pentagram formed by the brake lights on a school . . .

Rapper Tiny Doo May Face Long Jail Sentence Over Lyrics

Friday, 23 Jan 2015 18:10 PM

San Diego rapper Tiny Doo is facing a possible 25-year prison sentence for his violent song lyrics under a little-known  . . .

Top Stories

Newsmax, Moneynews, Newsmax Health, and Independent. American. are registered trademarks of Newsmax Media, Inc. Newsmax TV, and Newsmax World are trademarks of Newsmax Media, Inc.

America's News Page
©  Newsmax Media, Inc.
All Rights Reserved