The Pittsburgh Tribune Review published an article yesterday which offered a new explanation on why the Marcellus shale industry should not be subject to an extraction tax: citizens who have wells are paying more in income taxes.
When a driller puts a sink well in the backyard of a local citizen, the land owner has to report the amount they received in rent as earned income and thus, ends up paying more in income taxes.
The Trib quoted one resident saying, “I wrote the checks to pay the taxes, so I know. This thing is generating tax revenue. And rightly so. We make money, so we pay taxes. That’s how things work.”
The prevailing idea here is that the revenue generated by local farmers paying more on their income taxes exceeds that which would be paid by the industry in an extraction tax. Although it is difficult to determine this for sure since the state has yet to try an extraction tax.
This is not an argument the industry has been making widely but expect to hear it more as the Marcellus debate makes its ways into the halls of the General Assembly.