
California’s lack of an oil severance tax. Good or bad? Important or not?
When I joust with progressives about California taxes (especially vs. Texas), one favorite talking point that they raise is the lack of a California oil severance tax — a state tax on petroleum as it comes out of the ground.
They are inferring that the lack of a CA oil severance tax somehow justifies all the OTHER high CA state and local taxes. Of course, a little closer scrutiny shows this assertion is 99% bogus. Higher than 99%, actually. Mathematically higher!
Here’s the executive summary(data and sources below):
In 2015 Texas collected $4.179 billion in severance taxes from their oil and natural gas wells. If we levied the same severance taxes in California on our producing wells, in 2015, we would have raised $498million— because we produce a lot less oil and gas than Texas.
Contrast that amount with the expected individual income tax revenue projected in the 2016-17 California state budget — $83.841BILLION! And then there’s… Read More