Senate Democrats and others who should know better simply cannot give up on the notion of sticking the oil industry with more taxes, which, in their view, would fix Alaska’s fiscal mess.
Gov. Mike Dunleavy rightly denied their request to add oil tax reform to his second special call. His reason: There was not enough time to give the question its due.
The reality: It is a lousy idea.
Milking the industry for $1.2 billion more in the belief that – presto-chango – Alaska’s problems will vanish is silly. It already has been proved wrong. Painfully. It is unclear what the senators do not understand about the axiom: tax more, get less. They certainly should understand; it is what Alaska endured for a stretch, and with disastrous results, under Gov. Sarah Palin’s miserably failed Alaska’s Clear and Equitable Share oil tax.
AGIA’s back-breaking tax structure sent industry investment elsewhere and triggered plummeting production and revenue at the same time oil provinces all over the world were booming. Senate Bill 21 thankfully put an end to AGIA, which contributed at times to a 90 percent marginal tax rate at higher oil prices. The change was vital and long overdue, but industry-haters and the Left – are they not the same? – have howled since, even trying, and failing, to have it repealed.
The consequences of irresponsibly returning to any version of a failed tax system that retards oil production, investment and revenue is staggering. It would affect us all, in every corner of the economy just as the industry is bringing online new fields on the North Slope.
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