Earlier this week, Ted blogged about coal prices, and suggested that coal prices are not strongly influenced by state policy, and instead are set regionally. This would mean that differences in state taxes on coal production do not play a large role in the price of coal.
The below chart shows the average price of coal for West Virginia and our neighboring states from 1990-2010. And as the chart shows, despite large differences in tax structures, the price of coal in each state rose and fell at the same time. This again suggests that state tax policy has little to do with the price of coal, and that the price of coal is set regionally.
Source: EIA Annual Coal Reports
