This editorial appeared in The Lexington Herald-Leader.
Beware of raising taxes on businesses and services that can pick up and move to another state where the taxes are lower.
That principle guides most states' tax policies, and, by that logic, Kentucky's lawmakers should not shy from considering an increase in the severance tax on coal.
Kentucky's coal severance tax rate (4.5 percent) is lower than that of our nearest competitor, West Virginia (5 percent.)
Only Wyoming and West Virginia produce more coal than Kentucky, and Kentucky's coal can't be mined anywhere but here.
Even after raising taxes on tobacco and alcohol this year, the state is staring at a projected $1 billion deficit.
Yet, the idea of increasing the coal severance tax for the first time in 30 years is as alien to most Kentucky legislators as donning a Duke Blue Devils T-shirt or adopting Tennessee orange as the state color.
They can't imagine it.
Heck, the coal industry is so special it doesn't pay even a small fraction of its own permitting costs.
To read the complete editorial, visit The Lexington Herald-Leader.
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