At the same time, I must admit that I am not at all familiar with the details of the issue and must therefore rely on this story to explain it.
It has failed to do so.
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I’ll try since I lived through the issue (and basically supported it then), and my business is feeling its effects now.
ACES is a progressive tax based on the price of oil. The higher the price of oil, the higher the tax. It starts in the 20% range and goes all the way to the 90% range including a 12.5% state royalty. Meanwhile the Trans Alaska Pipeline (TAPS) is running at about 1/3 capacity and losing 6% a year; so future exploration is necessary or the TAPS may reach a point where it’s no longer economically feasible to run (estimated to occur in 5-7 years without additional production). Once it’s shut down the original act from the 70’s requires the pipeline and its infrastructure to be removed and the environment restored to its original state. Therefore, it is in Alaska’s best interest to somehow spur new exploration on state land especially in light of North Dakotas flat 12% tax on oil production. It’s a matter of staying competitive since the Feds won’t allow exploration on the 67% of Alaska they control. When ACES was passed a highly charged “Anti-Oil Corruption” political atmosphere existed.........and remaining competitive with other states was not necessarily fully considered. Now major exploration investment has since ostenibly left for more profitable grounds, while the major oil companies simply maintain what they have knowing full well the final circumstances of no new production to the State’s economy. It’s called being over a barrel.
I did not speak up because I had not facts, but I did suspect that the tax was populist --- simply because I remember that, during Palin's governorship, the sentiment was strongly against the oil companies that were supposedly "gouging" us, poor folks.
And, regardless of motives, any (i) progressive tax or (ii) linear tax that rises to 90% is plain stupid: it screams, "Don't do more work, don't explore, don't invest..." The only similar stupidity that I recall was during the New Deal of FDR when Congress passed a tax law with a maximum income tax of... 100% (together with state tax, it made it greater than 100%). In his infinite wisdom FDR, probably under influence of Morgenthau, reduced it to 90%. Socialist insanity at its worst. It really pains me to hear that the same is happening as we speak.
I am truly sorry to hear that you are on the receiving end of this, and your business is adversely affected. I very much hope that sanity will prevail -- for your sake, for the sake of people you employ, and for the sake of the rest of the country.
Thank you again for educating me on this issue. It's not the information that is easy to acquire.