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Show ByJackWallis LaOfrr I 6 severance tax is unfair We are surprised at the reasons the Salt Lake City daily newspapers have given for favoring raising Utah's oil and gas severance tax from its present two percent to a six percent level. No bones seem to be made about "soaking it to the so-called fat cat oil companies." In defiance to an advertising advertis-ing campaign staged by independent oil producers saying the 300 percent increase in-crease in oil severance taxes will drive the oil industry to greener pastures, the daily papers have said "we don't think so." Other states have higher oil and gas severance taxes than Utah's, the papers are quick to point out. Oil producers can afford to pay higher Utah taxes so let's sock it to them. At a time when the price of oil is falling fall-ing and when unemployment, never before experienced in the oil industry in Utah at the present extent, it seems poor reasoning to say the oil industry can be further taxed without hurting the industry in-dustry or the local economy. A two percent severance tax on full oil and gas producing capabilities is better than a six percent tax on cutback production. Let's face it, the U.S. isn't crying for Utah oil and gas right now. If the cost is out of line, other areas can be produced. produc-ed. Oil companies can sit on their Utah oil and gas and wait until the price is right. Then who is the loser? Not only will the state lose its severance tax money it will lose that segment seg-ment of its economy contributed by the oil industry, and we dare say this will be much more than would ever be gained by an increased severance tax. If a six percent severance is so good for the oil and gas industry, why not place the same tax on other resources such as copper and iron and non-metalliferous non-metalliferous mineral such as coal, phosphate, potash, etc. Why single out the oil and gas industry? A severance tax on coal was attempted, attemp-ted, but a cry went up so loud it was soon very unpopular. But other states charge coal severance taxes, some very high, why shouldn't Utah get some of the coal producer's money? They can afford it. The same can be said for copper. We can imagine the indignation some of the Wasatch Front politicians would have at the thought of adding a severance on Kennecott's Utah operations. We would have to say that mining coal and copper do more to damage the natural environment than does drilling for oil and gas, so they should be required to pay more mitigation for their destructive destruc-tive methods of taking away an ex-haustable ex-haustable natural resource. So by their nature the copper and coal industry should pay a higher severance tax than the oil and gas industry. But this does not seem to be the case. . Oil and gas has been portrayed as a hugh profit industry with lots of money to throw around. We doubt this is the case. Oil and gas exploration is just as costly as the mining industry, if we go after the marginal production areas of oil and gas. Most of Utah oil and gas is marginal and more expensive than other areas to drill and produce. Some of Utah's oil has to be heated to high temperatures before it can be produced. Utah's gas production produc-tion is trapped in tight sands that take expensive ex-pensive operations to produce. We think it is just a matter of whose foot the tax shoe is on. No industry wants to pay additional taxes. But it is very unfair un-fair to single out one industry above many others as a tax goat. Others should also share the cost of running the affairs of the state. If Utah teachers and state employees need higher wages, let's make everyone contribute their fair share and not single out one industry. We hope the Governor's proposed oil and gas severance tax is taken lightly by the Legislature. Some have given the opinion opi-nion that the Legislature will not increase in-crease the severance tax on oil and gas because of its conservative philosophy of not raising taxes unless it is absolutely necessary. We hope this is the case but it is frightening to consider what could take place if the Wasatch Front Legislators raised taxes on industries that provide the back-bone of the economy for small rural communities such as ours. Don't kill our hen that lays the golden egg. |