The contract for Dr. Richard Pomp, the man who wrote the proposed Alaska income tax that was inserted by the Governor into House Bill 115, shows that Pomp has been on contract with the Walker Administration since Nov. 4, 2016.
And he will remain on contract through June 30, 2017.
Although his contract stipulates he’ll be available to testify on the bill he authored, he has not yet been called by the co-chairs of House Finance, which is hearing the bill this week.
He’s not been seen in the Capitol as questions are raised by both committee members and the public, for whom this tax plan is a difficult structure to understand.
Public hearings continue on Thursday. The committee, dominated by Democrats, could vote on HB 115 on Friday, if the co-chairs choose to move the bill out of committee.
“Version L” of HB 115 introduced numerous tax brackets and marginal tax rates. There are precious few deductions.
Alaska Natives who receive Native Corporation dividends get those taxed at 2.5 percent, while Alaskans with trusts get taxed at 7 percent. All income – pensions, fixed, rental, or wages – is treated as income. Even unions pensions are taxed as regular income.
The devil of this tax plan is in the details, however, and there are precious few details to be found in HB 115. Most of the tax rules will come through hundreds of companion regulations that would have to be written by the Department of Revenue.
Republican members of House Finance have posed numerous questions that neither Rep. Seaton nor his aide Taneeka Hansen have been able to answer this week.
Seaton allowed Gov. Walker to insert the “Pomp Tax Plan” language into his pre-existing bill, which had an entirely different tax plan in its original form.
But the news that Pomp was hired by the Administration to write the income tax plan came out Monday and has reverberated throughout the Capitol.
Instead of hearing from the author himself, the committee has heard from Carl Davis, who is a research director at the Institute on Taxation and Economic Policy, a pro-income tax group. Pomp serves on the board of ITEP.
Additionally, Pomp’s contract is not with the Department of Revenue, but actually with the Department of Law. Approved by Deputy Attorney General Jim Cantor in early December, the start date of Nov. 4 indicates the search for an appropriate person to write an income tax plan for Alaska took place throughout the fall.
In other words, Governor Walker’s Administration has been quietly working on developing new, more aggressive income tax legislation for months prior to the convening of the legislative session.
With Gov. Walker making statements weekly about the need for new revenue, it’s likely he signed off on the contract with Pomp. His Attorney General Jahna Lindemuth would also have been in the loop. Walker would have needed a tax expert with the “progressive tax” sympathies that reflect that of the Democrats, his current political allies.
Walker found that soul mate in Richard Pomp.
Pomp, whose curriculum vitae is 16 pages long, is a guy who lives, eats, and breathes tax policy. He is no stranger to Alaska, having served as a consultant to the Department of Revenue from 2009-2010. He has also been a consultant to the left-leaning Citizens for Tax Justice.
In the contract appendix, it’s noted that Pomp is expected to testify before the Legislature:
“At the specific direction of the Attorney General’s Office, the Contractor shall provide legal research and advice on two pieces of proposed legislation concerning income tax: 1) a personal income tax calculated as a percentage of the Adjusted Gross Income reported on federal income tax returns and 2) a measure to modify the rate structure of Alaska’s existing corporate tax and make provision for taxation of income from S-Corporations. It may be necessary to also provide expert testimony as the bills work their way through the legislature.”
Appendix D indicates that Pomp would be available:
“In full consideration of the Contractor’s performance under this agreement, the State shall pay the Contractor for the professional services of Richard Pomp $85,000 upon completion of the scope of work on or about December 15. That fee will include subsequent testimony on the work product.”
The concerns and questions keep adding up for HB 115, but the proposed income tax author is nowhere to be found in the Capitol.