Resource taxation, tax exportation, and regional energy policies

An analysis of energy policies and natural resource taxes, specifically severance taxes on coal, in the Rocky Mountain Region examines how public policies can be used to achieve alternative economic objectives. Over 42 percent of the country's coal reserves are located in six states, which vary in the extent of their reserves, production, and export and disagree on the use and importance of coal taxes. Severance taxes and a combination of severance and property taxes are considered in a model of three states covering a range of coal supply and demand. A comparison of the results with the current situation in the Rocky Mountain Region considers the effectiveness of a uniform taxing cartel in maximizing total tax revenue and constraining tax exportation. Severance taxes are seen to accomplish the objectives of states with high production levels but create instability for the region because of the need to rely on property taxes in the states having less coal production. (DCK)