From the OLR Group... ALASKA OIL AND GAS PRODUCTION TAX
Alaska's oil and gas production tax (Alas. Stat. Sec. 44. 55. 011) applies a percentage tax rate on the net value of oil and natural gas produced in the state. In the case of oil, the net value is the market value of the oil that is shipped to the West Coast, after deducting the producer's production costs (currently about $ 25 a barrel). The law provides for transferable credits against the tax for various expenditures, including oil and gas exploration investments and contributions to higher education institutions in the state. This tax is in addition to royalties paid to the state from production on state land and income and property taxes.
There is a minimum tax based on the gross value of oil produced from the state's North Slope. The minimum is 4% of the gross value so long as the average price of oil on the West Coast is at least $ 25 per barrel (the percentage decreases if the price falls below this level).
There are separate tax rates for (1) oil and gas produced from the fields around the Cook Inlet in southern Alaska and (2) oil and gas produced from property that constitutes a landowner's royalty interest.
In 2007, HB 2001 increased the base tax rate from 22. 5% to 25. 0% of the net value of the oil or gas. The legislation modifies a feature of the tax under which the tax rate increases once the market price reaches a specified level. Under the act, if the net value of oil or gas is less than $ 92. 50 per barrel of oil equivalent, it is subject to a tax of 25% of the net value plus 0. 4% times the difference between the net value and $ 30. Thus, if the net value was $ 80 per barrel equivalent, the tax would be $ 20. 20 (25% times $ 80, plus 0. 4% times $ 50). The rate of the added tax falls to 0. 1% times the difference between the net value and $ 30 if the net value exceeds $ 92. 50.
The act has many other provisions. These include (1) increasing credit for exploration expenditures, (2) making certain expenditures, such as those associated with cleaning up spills, ineligible for the credits; (3) establishing a state fund for purchasing the credits.
Now let me repeat the key aspect of point... and please.....repeat please tell me how this is not a windfall profits tax?
In 2007, HB 2001 increased the base tax rate from 22. 5% to 25. 0% of the net value of the oil or gas. The legislation modifies a feature of the tax under which the tax rate increases once the market price reaches a specified level. Under the act, if the net value of oil or gas is less than $ 92. 50 per barrel of oil equivalent, it is subject to a tax of 25% of the net value plus 0. 4% times the difference between the net value and $ 30. Thus, if the net value was $ 80 per barrel equivalent, the tax would be $ 20. 20 (25% times $ 80, plus 0. 4% times $ 50). The rate of the added tax falls to 0. 1% times the difference between the net value and $ 30 if the net value exceeds $ 92. 50.
And you ask for a "direct" answer to something you cannot defend in equally direct terms? Of course you can't, because it's complicated and mathematical. Why should I go to the trouble of replicating what others have done? I provided links for FReepers and lurkers to go investigate for themselves, as I had done earlier, for the non-direct argument against your demonstrably non-direct charge. It's too complicated for a direct answer, just as it was too complicated for you to explain simply why it qualifies as a "windfalls profits tax."
FOOD FOR THOUGHT in a non-direct way. FReepers and Lurkers, read this from the frightening Palin-hopeless start all the way to the bottom. Way down -- after the panic has subsided and cooler assessment starts to kick in (pretty far down the discussion thread), a person who appears to have worked on such contracts points out:
1. The profound distinction between royalties and taxes, and that a royalty is not even a tax, let alone a windfall tax.
2. That a private landowner could charge a flat fee, but more likely would opt to participate in the profits in escalating royalties. Points out that at $20 a barrel, would want the royalty/lease fee to be $1 to $4 per barrel, but $12 per barrel at $40 per; this would be standard in a private contract.
3. That oil producers should expect to pay the same type of fees they'd pay in a private contract; if states and fed didn't do this, why would oil companies ever drill on private land?
4. The accounting purpose of describing escalating royalties as taxes as part of the contract would allow the oil companies to use the "taxes" to offset other taxes; speculates that was worded such in Palin's deal for the express purpose of providing those breaks to the oil companies.
Lurkers, fellow FReepers, and you, Catfish who "likes Palin but ..." (and who has regurgitated directly what another FReeper ID'd as Maureen Dowd's "caribou Barbie" Palin insult here on Free Republic), I could (and will, once again) spend HOURS investigating and reading the real depth of this, which AGAIN reveals that Catfish is MISREPRESENTING, and many would say DOWNRIGHT LYING when he characterizes this as a Windfall Profits Tax; one poster even links to this blog that purports to point out that much of the taxation Catfish demonizes with Drama Queen phraseology "Windfalls Profits Tax!!!" isn't even an income tax, but a severance tax.
CATFISH, so far this is a 600+-word post -- because there can be no DIRECT answer to your question; your charge is deceitful by being indirect, and so revealing it as false must be equally "indirect." So Folks, GO DO YOUR OWN DUE DILIGENCE and relax in the knowledge you'll find by doing so that Catfish and others are misrepresenting Palin here. Then next time you watch in horror as this single "Windfall profits tax!" charge silences and discourages Palin supporters as you see it did on the Hot Air blog, you will know that you are righteous and accurate in calling bullsh*t on it, but that it's damned near impossible to do it directly. Guys like Catfish are banking that you won't go to the trouble. He's deceitful.