A University of Connecticut School of Law professor of tax law is the apparent author of the newest version of Governor Bill Walker’s income tax, HB 115, according to sources in the Department of Revenue.
Notable in the proposed income tax is how closely the tax structure that Dr. Richard Pomp has provided to the Department of Revenue mirrors the complex state tax brackets of Connecticut. Connecticut has a $15,000 personal exemption, for example; the one Gov. Walker is proposing has a $14,000 personal exemption.
Connecticut’s state tax system is unique and has various phase-out provisions that make it hard to compare with HB 115, but both tax systems contain several tax brackets. This bracketed approach is in contrast to the much simpler tax that Walker promoted last year.
Pomp is also on the board of the Institute for Taxation and Economic Policy, a pro-tax group that is being used heavily by the Democrat-led House Finance Committee. Pomp is said to have been paid $85,000 for his efforts on behalf of the governor and Department of Revenue.
Read more about the Institute for Taxation and Economic Policy here.
Pomp is the author of a textbook, State and Local Taxation.
Testimony under way in House Finance today, with stiff opposition from most who are testifying. Rep. Paul Seaton, co-chair of the committee, and Rep. Les Gara, vice-chair, challenged several of those opposing the bill, indicating that they don’t know what they are talking about, and making sure they as tax proponents had the last word.
One testifier who owns a financial management company told the committee that over 100 jobs would be lost when financial companies who manage trusts move their operations to other states.
Bob Pawlowski, a retired captain of the National Oceanic and Atmospheric Administration, expressed concern about the impact of the income tax on pensions.
“As a senior, I think it’s really important that we have something that recognizes fixed income,” he said. “We bring a lot of money into this state but we have no earning potential.”
He also asked the committee to consider the impact of an income tax on military retirees, who have a choice to retire here or elsewhere.
Libby Dalton Slane, a 60-year resident of Fairbanks, said: “State operating costs have grown an average of 8 percent annually. Why is that? The answer is simple. We have a spending problem. Unemployment is the highest in the nation. You are already capping our PFD. Imposing an income tax will further damage our sluggish economy.”
She offered alternatives, including using existing savings to bridge to a sustainable budget in four years, implementing revenue limits, making spending reductions, and protecting the Permanent Fund Dividend as well as the Permanent Fund Earnings Reserve Account. In other words, she outlined much of what is in Senate Bill 26, which passed the Senate earlier this month but is languishing on the House side.
Kate Blair of Tesoro says there is a flaw in HB 115 as it relates to publicly traded companies and how the tax would apply to shares that are bought and sold numerous times. Blair is the government and public affairs manager at Tesoro Corporation.
Juneauite Judy Andree of the Alaska League of Women Voters supported the income tax because it is progressive. She opposes further cuts to State government.