Wolf's problematic 5% severance tax proposal is wrong for PA in a multi-layered way that will harm PA in-the-shale landowners badly.  We will be taking fire from a couple of different directions at once.

Looking at the first layer, it is true as Wolf trumpets that most other drilling states already have a severance tax in place.  But those same other states do not also have Pennsylvania's very high corporate income tax.  Wolf never mentions this, obviously.  As a Democrat, Wolf wants to see PA taxation along the lines of New York, California, and Illinois.  We all know how those states are thriving!  A 5% severance tax, alongside Pennsylvania's already-existing corporate income tax, will mitigate in favor of drilling outside Pennsylvania.  And when that happens, to paraphrase Seinfeld, "no royalties for you!!"

At the second layer, PA in-the-shale landowners who collected $10000 in royalties in 2014, and if all other things remain equal, can look forward to just $9500 in royalties in 2016 if Wolf's confiscatory tax takes hold.  That's a major hit to our royalties even if drilling continues into the future as now is the case.

Winners and losers

As with anything else, there are winners and losers.  Landowners who already have collected a lot of royalty money while Governors Rendell and Corbett were in office are the winners.  Landowners not yet drilled, or where production has not yet begun, are the big losers.  If Wolf gets his way, every single cubic foot of their gas will be hit with a 5% tax other landowners did not have to pay!!

I certainly hope Wolf can be stopped.  I'm not certain he can.