Because a day without Sarah is a day without sunshine.
Posted on 08/11/2008 8:10:37 AM PDT by WilliamReading
John McCain and nearly every economist agrees that a windfall-profits tax on the oil industry would drive away investment, increase prices to consumers, and make Americans more dependent on foreign oil. If anyone wants to see that in microcosm, they only need look at Alaska. With the backing of Governor Sarah Palin, the state managed to drive away investment in development by hiking taxes on oil companies drilling on state lands:
Over the opposition of oil companies, Republican Gov. Sarah Palin and Alaska’s Legislature last year approved a major increase in taxes on the oil industry — a step that has generated stunning new wealth for the state as oil prices soared. …
BP Alaska, which runs Prudhoe Bay, said earlier this year that it had delayed the development in the western region of the North Slope as a result of the tax. ConocoPhillips cited the same reason for scrapping a $300 million refinery project.
“What the tax has done is take away all the upside,” said Doug Suttles, president of BP Alaska. The U.K.-based oil company paid more than $500 million in taxes to Alaska last quarter — far more than it earned in profits from Alaskan oil, according to Suttles.
Investment dollars are flowing instead to places that have a better return, like the massive deep-water projects offshore in the U.S. Gulf of Mexico, where ConocoPhillips said the government take equals less than 50 percent of the barrel.
In fact, Palin’s plan looks similar in concept to Barack Obama’s plan. The state gave Alaskans $1200 checks from oil revenues as a one-time bonus to pay for increased fuel prices, a move Palin pushed. That echoes the Obama plan to send one-time rebates to taxpayers, funded by similar levies on oil companies.
However, the results in Alaska should warn the rest of the country about pursuing this policy. Already oil companies have stopped drilling on state lands, thanks to the tax burden Alaska imposes. It should be cheaper to drill and extract from these areas, but the oil companies have decided to focus their investment instead on the Gulf, where the costs and risks would normally be higher. In Alaska, the government takes 75% of the price on a barrel of oil at current prices, which gives them no incentive to work there.
This may burst the Palin-for-VP bubble. I have rarely seen John McCain and Sarah Palin together anyway.
another RINO?
Sarah Palin is generally a good candidate but so many of our GOP have lost their way on the expediency of taxes. I mean it is so easy and everyone in government which surrounds you cheers your on.
She’s out. End of story. Who’s next on the list ?
That's a high tax on a barrel of oil but that's not a windfall-profit tax as the title states.
Not really but certainly someone who needs to get back in line. The GOP needs to stand against the expediency of tax and spend.
Yes, it did. Damnit.
I don't know what chance she really has/had?
Paris Hilton? /sarc
I believe it will be one of these four people:
Eric Cantor
Tom Ridge
Mitt Romney
Tim Pawlenty
Pawlenty seems the weakest of this quartet.
Alaskazuela
If Barack Obama raises his giveaway check from $1,000 to $1,200 , they could at least be on the same page.
This would devastate McCain if Palin were on the ticket.
Isn’t Hot Air Michelle Malkin’s site? If so, not sure why she’d twist anything against a republican.
It's tougher in Alaska my ass.
Palin: It’s going to take at least five years. You know, and there are other areas in Alaska too, that have the reserves that need to be tapped, certainly offshore. There’s trillions of cubic feet of natural gas, and billions of barrels of oil there too that need to be tapped. We also have a natural gas pipeline that is underway now, a process to get that constructed, where we can build infrastructure and allow known reserves of natural gas up on our North Slope - it’s already there, it’s already proven – to be tapped and flow through a natural gas pipeline. Our legislature is dealing with that issue right now, getting ready to license a company to build that gas line. Again, to feed these hungry markets.
Kudlow: Alright, so now you’ve got another case where both candidates seem to be off course. Senator Obama wants a windfall profits tax on oil companies. And Senator McCain talks about obscene profits, which I regard as the near cousin to the windfall profits tax. What’s your response to these criticisms?
Palin: Well we just went through a process of making sure that the oil and gas resources that Alaskans own are properly taxed. And we just increased a tax on profits of oil companies up here, because an earlier version of Alaska’s tax formula had been corrupted by some politicians who are now in prison for the corruption. But we had to revisit the way that we were going to tax profits on oil companies. We just got through that, and it wasn’t an obscene amount of tax placed upon them. In fact, it’s driven more by a desire to explore and to develop with independent companies coming into Alaska. So you know, on a national level, they’re going to have to deal with that, but we just dealt with it on Alaska’s level. And we have a healthy valuation of our oil and gas reserves, and we’re deriving healthy revenue for our state off that.
Kudlow: Well are profits a dirty word? In energy, or other businesses?
Palin: Well no, of course not. And low taxes of course, we know spur the economy. I’m a Republican. I am for low taxes. We have to make sure though that an appropriate value is placed oil and gas resources. And that the people who own these resources are able to benefit from the development of them. But no, profit is not a dirty word.
Kudlow: Why don’t we just liberate, and decontrol, and deregulate the whole bloody energy business – whether it’s oil, gas, shale, nuclear, coal, natural gas, as well as wind and solar – why don’t we just decontrol, deregulate, go for an America first energy policy? Get independent of Saudi Arabia? America first. Create all of these millions of high paying jobs. Why isn’t anybody talking about that in this race? That’s the natural, Reaganesque thing to do. Isn’t it?
Palin: Yeah absolutely! You’re hitting the nail right on the head. That’s what so many of us normal Americans are asking. The same thing. Why aren’t the candidates talking like that? Where we can secure America and we can be more independent when we talk about energy sources if we could drill domestically.
Here we sent [Energy] Secretary Bodman overseas the other day, and our president had to visit the Saudis a few weeks ago, to ask them to ramp up development. That’s nonsense. Not when you know that we have the supplies here. You have the supplies in your sister state called Alaska, where we’re ready, willing and we’re able to pump these supplies of energy, flow them into hungry markets across the U.S. We want it to happen. It’s Congress holding us back.
let’s get all of the facts first, somethng that Hot Air doesn’t always do.
One conservative in the four.
Obviously it won’t be Eric Cantor.
Looks like, as I suspected, there is a lot more to this story.
http://dwb.adn.com/news/politics/story/9283323p-9197836c.html
Marilyn Crockett said this week that the proposal could decrease investment in the state by raising the tax burden on companies.
Crockett also said it would replace a tax that isn’t broken and has not yet had a chance to work.
“The industry does not want to have a special session,” she told members of the Alaska Support Industry Alliance at a luncheon in Fairbanks.
Other members of the oil and gas association, which include Exxon Mobil, BP and Conoco Phillips, also expressed their reservations about Palin’s proposal.
“We agree with the governor’s approach to stay with a PPT-based tax structure; however, we are concerned that the tax rates proposed will make every single project look less attractive for us to reinvest,” Kevin Mitchell, vice president of finance and administration for Conoco Phillips, wrote in an e-mail to the Fairbanks Daily News-Miner.
Palin this week restated her intention to call a special legislative session next month to revisit the oil production tax passed last summer. She also presented an outline for a new tax that would increase the tax rate.
Palin said the current petroleum profits tax, or PPT, “isn’t working as promised.”
Revenue Commissioner Pat Galvin has said that revenues from the PPT will likely come in a little short of expectations in the fiscal year that just ended and very short of expectations next year.
Terrific.
Not.
Because a day without Sarah is a day without sunshine.
She’s the most liberal governor in the history of the country. 75% tax? Wow.....
:-)
Face it, McCain’s still at the top of the ticket. The veep doesn’t really matter.
Alaska has always had a tax on oil production in Alaska....
When single issue fiscal conservatives drive the selection process the Republicans lose. Before Reagan the last fiscal conservative was Herbert Hoover and before the Reagan landslide of 1980 brought in a Republican house and Senate it was 40 years since the Republicans controlled either house of congress. Reagan proved that a candidate that appealed to the fiscal conservative, social conservative, blue collar Reagan democrat,defense minded voter would win and Palin would do that.
So what we have is yet another politician more interested in vote-buying and winning re-election than doing what is best for the nation and the American people. What a shock!
Politicians just don't get it! When you get greedy, you don't get any piece of the pie. Don't these people understand company profit incentives?
Taxes are dis-incentives.
How does Palin's support for a tax increase appeal to fiscal conservatives, exactly?
Palin knows absolutely nothing about foreign affairs . . she would be overmatched in a VP debate with someone like Evan Bayh . . and could probably lose to even Tim Kaine.
Time to give it up . . Palin is toast.
The article is very vague on what was and what is the case.
TIA, mate!
A candidate does not necessarily have to appeal to every constituency 100%. Since you think that 100% is the threshold, which VP choice would please the disparate constituencies of the Republican Party 100%?
WilliamReading,
The reason why the new tax was put in place was due to the Veco scandal with state legislators. Veco is directly connected to the oil companies and they essentially bribed state legislators to keep taxes low the previous year. When they were got doing so, people were pretty outraged and the leverage was used to pass a higher tax. With the price of oil up this year, the Alaska legislature just authorized an energy rebate to every Alaskan who gets a permanent fund dividend. So in addition to 2,000 dollar PFD, we all get another 1,200 dollars for an energy rebate. So a family of 4 will rake in 12,800 dollars this October.
In addition, some local cities with extra money (like Valdez) will also try to help with energy bills this winter. Valdez, for example, will contribute cash to tack on a 640 dollar credit to every person’s local utility bill in November.
Most these people, don’t understand or have a clue concerning the history of oil companys in Alaska. If they had any idea; they wouldn’t display such ignorance of the entire issue. Palin is a Republican; but does the right thing when the repubs are bought out by the oil industry; and many are here in Alaska; why so many repubs are heading off to the big house up here. I’ve watched Palin since she became mayor in Wasilla; never lost trust of her integrity and commonsense which is more than I can say about the majority of Republican politicals up here. Palin has proved up time after time; why her ratings are in the 80% range with the Alaskan People; what matters in the end. Palin is showing Alaskans that the Republican Party can be legitimate, honest, and lead to good government. Without Palin, the Repubs would be swept out the door due to all the corruption surrounding the Party & Oil Industry. Repubs were awful lucky to have somebody like Sarah Palin come along.
Somebody owns it.. not the oil companys..
The oil companys are well remunerated for their efforts...
Who OWNS Alaskas OIL(natural gas)?...
Someone owns it.. The federal gov't don't own it..
NO... the federal government SHOULD NOT OWN IT.. thats better..
The federal gov't should Not get ONE PENNY of the price of Alaskan OIL and Gas..
They do literally NOTHING to earn it.. NOTHING..
WHo does Alaskan OIL belong to?..
Who owns it?..
Somebody owns it.. not the oil companys..
The oil companys are well remunerated for their efforts...
Who OWNS Alaskas OIL(natural gas)?...
Someone owns it.. The federal gov’t don’t own it..
NO... the federal government SHOULD NOT OWN IT.. thats better..
The federal gov’t should Not get ONE PENNY of the price of Alaskan OIL and Gas..
They do literally NOTHING to earn it.. NOTHING..
signed Barack H. Obama
The web site name of "Hot Air" is fitting. That claim is false and full of "Hot Air".
Hold on there, partner. Where did I declare that "100% is the threshold"? Seems you put those words in my mouth. (keyboard?)
For that matter, where did I say that Palin should not be considered for VP?
It was you who said something about her appealing to fiscal conservatives, and it took off from there.
FWIW, I still think she'd be a good pick for VP, other than the fact that she can't stand McCain. I started by simply lamenting the fact that so many Republicans seem to be falling in love with taxes, which is a Bad Thing. However, I try to be realistic when it comes to 100% perfect conservatives in government.
The state of Alaska receives a royalty of approximately 12.5 percent of the oil and gas produced from its leases.
There is levied on the producer of oil or gas a tax for all oil and gas produced each month from each lease or property in the state, less any oil and gas the ownership or right to which is exempt from taxation or constitutes a landowner’s royalty interest. Except as otherwise provided under (j) and (k) of this section, the tax is equal to the greater of 22.5 percent of the production tax value of the taxable oil and gas as calculated under AS 43.55.160 , or the minimum tax determined under (f) of this section.
http://www.tax.alaska.gov/programs/documentviewer/viewer.aspx?129s
Alaskas resources does not rightfully belong to Borat Obama or John McLaim..
Alaskas resources belong to or are owned by Alaskans..
But in America today a question must be asked...
How can something you own be taxed?..
Is so, then you are renting it from the government..
And you don't really own it at all you are loaned possession of it by the government..
Classic Marxism.. and Obama(and Hillary) are Marxists..
Students of Alinsky and Antonio Gramsci..
Unfortunately, most of Alaska is Federal Land, not State, Native or Private.
Exactly.. How can Washington D.C. OWN ANY LAND?..
That flys in the face of the Constitution..
And makes the STates property of the federal government..
I am not sure what you are talking about, but you sound a lot more like Hugo Chavez than Ronald Reagan when you say that Alaska’s oil belongs to alaska.
Those rights were long ago leased or sold to the Oil Companies.
This situation seems like a taking of private property. The residents of Alaska have voted themselves the right to oil and gas royalties. Normally, royalties accrue to owners of the mineral rights. I know that the good citizens of Alaska enjoy the fruits of labor by the oil companies. What gives Alaskans the right to award themselves royalties when most Alaskans are not stock holders in these companies?
The impact of these kind of policies is to increase the cost of energy production and decrease production levels. Essentially Alaskans are assessing a tax on residents of other states.
I didn't say that.. I said Alaskas oil belongs to AlaskaNs..
And it does.. Alaskas oil does NOT belong to AMERICA..
Unless this country is a democracy and NOT A REPUBLIC..
You don't read good..
They did write the check...
The problem is not with the oil in areas that have been leased. The problems is with the vast areas like ANWR coastal plain that has not been leased.
That went over my head..
I was referencing the actual purchase of Alaska from Russia.
http://www.state.gov/r/pa/ho/time/gp/17662.htm
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