Empirical investigation of optimal severance taxation in Alabama. Volume II
The research develops a theoretical and empirical foundation for the analysis of severance taxation in Alabama. Primary emphasis was directed to delineating an optimal severance tax structure for the state of Alabama and, in the process, assess the economic and fiscal consequences of current severance tax usage. The legal and economic basis and justification for severance taxation, the amounts and distribution of severance tax revenues currently generated, the administration of the tax, and severance tax practices prevailing in other states were compared in Volume I. These data, findings, and quantitative analyses were used to ascertain the fiscal and economic effects of changes in the structure and utilization of severance taxation in Alabama. The actual and potential productivity of severance taxation in Alamama is discussed. The analysis estimates the state's severance tax revenue capacity relative to the nation and to regional neighbors. The analysis is followed by an intrastate fiscal examination of the state and local tax system. In the process, the relative revenue contribution of severance taxes to state and local revenues is quantified, as well as comparing the revenue capacity and utilization of severance taxes to other state and local levies. An examination is made of the question of who actually pays the severance taxes by an analysis of the shifting and incidence characteristics of taxes on natural resources. Serious doubt is raised that states can, under normal economic circumstances, export a large portion of the severance tax burden to out-of-state users. According to the analytical results of the study, profit margins will be affected; therefore, higher severance taxes should only be imposed after rational assessment of the consequences on business incentives and employment in the extractive inudstries, especially coal.
- Research Organization:
- Alabama Univ., University (USA). School of Mines and Energy Development
- OSTI ID:
- 5317634
- Report Number(s):
- NP-2903939; ON: DE82903939
- Country of Publication:
- United States
- Language:
- English
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