Alaska state senate republicans 'Not Convinced' that taxes are a job-killer

Gov. Sean Parnell

File this under "Are you serious?" Alaska State Senate Republicans are pushing back on Gov. Sean Parnell and the House regarding Parnell's plan to cut oil taxes industry wide. I am not kidding, this from the Anchorage Daily News:

JUNEAU -- The 2011 session of the Alaska Legislature began Tuesday with senators saying Gov. Sean Parnell's proposal to slash oil taxes could have a hard time getting passed before lawmakers go home.


"I've heard a lot of pushback among legislators just from chatting in the hallway about it," said Senate President Gary Stevens, a Republican from Kodiak. "It's going to be a hard sell."

Sen. Gary Stevens

Parnell is asking the Legislature to agree to cut taxes by an estimated $5 billion between 2013 and 2017. It's an issue likely to dominate while the Legislature is in session for the next three months.


Parnell and top Republicans in the state House describe the profits tax as a job killer. But key senators are not convinced and say they need to get more information about the impact of the oil tax system imposed under Gov. Sarah Palin in 2007.

Particularly contentious could be the Republican Parnell's plan to lower the base production tax rate from 25 percent to 15 percent for new oil fields. It's a piece of his broader effort to lower taxes.

Sen. Bert Stedman

"The chance of it going to 15 (percent) is slim," said Sitka Republican Sen. Bert Stedman, who is co-chair of the Senate Finance Committee.

The article goes on to explain that studies are inconclusive as to whether high taxes have a negative effect on oil companies investing and expanding operations in the state. What is bothersome is that it is simple: taxes mean less money to the companies, meaning they get less dollar-for-dollar on their investment. The worst part is that the tax is profit based and actually increases as oil prices go up:

Much of the complaint about the profits tax is how it rises from the base rate of 25 percent when oil prices go up. The Revenue Department said the tax is about 33 percent when oil is at $75 a barrel. Parnell wants to change how the curve works.

Read more: ADN - Legislature, Oil Taxes

It is easy folks: Taxes are bad. They hurt jobs, profits, the economy, and small woodland creatures. Less taxes is good - always.

###