SINGLE WOMAN IN ALASKA? YOU’RE GOING TO NEED A SPOUSE
Gov. Bill Walker’s income tax plan is no friend to single Alaskans.
Especially single Alaska women. And especially senior citizens and the disabled, many of whom are — wait for it — single with no dependents.
If you’re an Alaska single person without dependents and you gross $50,000 a year, under the governor’s plan your tax will be about $867.
But if you’re married, you and your spouse will pay just $484.
HB 115, Gov. Walker’s tax plan, hits single women particularly hard because, in Alaska — and elsewhere — women earn less than men.
Now, not only are they earning less, the governor plans to tax them at a higher rate than their married peers.
The tax brackets provided by the Governor’s Office through the Department of Revenue play favorites with investment dividends, too.
If you are fortunate enough to be a shareholder of a Native Corporation, you’ll only be taxed at 2.5 percent on your dividend. But all other dividends — including those that senior citizens depend on — are taxed as regular income, through a complicated set of brackets and marginal tax rates established by a taxation expert from Connecticut.
Walker, who last week slipped his income tax plan into an existing bill, HB 115, does all that, and more.
Instead of raising the $200 million with his 2016 proposed income tax plan, this year he has ratcheted it up to $660-700 million in taxes from Alaskans’ paychecks. He’s asking for 60 new Revenue collectors to do the work, a number that appears highly unrealistic given the complexity of new tax plan.
Rep. Paul Seaton, co-chair of House Finance, offered his income tax bill on February 10, 2017. He held hearings and took testimony.
He knew last year, however, that the Governor’s Office had hired an outside tax consultant, Dr. Richard Pomp, of Connecticut, to craft a new tax bill, which Pomp had provided to the governor in mid-December at a cost of $85,000.
Rep. Les Gara knew about it too, he said on Thursday during House Finance hearings.
Dr. Pomp was paid for by funds from a vacant position, explained Department of Revenue Tax Division Director Ken Alper on Thursday.
Seaton told members of the committee this week that the new tax plan was in response to the testimony the committee had received on his original bill.
And yet, the contract for Dr. Pomp began on Nov. 4, which means the bill Seaton offered was not in response to testimony received in Febuary, 2017.
The media has not yet asked Seaton when he knew of the existence of the tax plan that he allowed the governor to drop into House Finance last week under Seaton’s name.
Seaton has repeatedly told the press that the House Finance Committee is operating under the most transparent process in legislative history.
Yet, he neglected to inform his committee or the public that there was a completely new tax plan in the wings that would be inserted into his tax bill — a plan that would hit Alaskans squarely in their wallets.
Only through the insistence of Rep. Tammie Wilson, R-North Pole, were additional public hearings held this week on the massive changes that had been rolled into Seaton’s placeholder bill.
As this week’s public hearings went on, Seaton was evidently unfamiliar with the impacts that the governor’s tax plan will have on Alaskans. For example, neither he, nor the Department of Revenue, could answer why Alaskans who have trusts will be taxed, while Outsiders who have trusts in Alaska will be exempt. He was caught by surprise by one trust manager who said over 100 jobs would be lost as financial managers move out of state, and take the trusts with them to tax-friendly jurisdictions.
Rep. Les Gara, D-Anchorage admitted that he knew about the tax changes long before they came. He said he had spoken to Alper last year and learned that the department was using an Outside tax consultant to come up with a new tax strategy, after last year’s colossal failure to get any of the governor’s taxes through the Legislature.
“I don’t want anyone to think anything was hidden from them,” Gara said.
Gara said he supports Alaska having its own tax brackets like the ones being offered, rather than ones tied to the federal tax brackets, which could change.
Rep. Wilson asked that the consultant who wrote the bill be brought before the committee to answer the technical questions that neither Seaton nor Revenue could answer, but did not get an agreement from Seaton on Thursday.