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Palin Raised Taxes On Oil Company Profits
The Seattle Times ^ | August 10, 2008 | By Ángel González and Hal Bernton

Posted on 08/30/2008 9:10:30 PM PDT by RushingWater

Republicans in Congress this June united to defeat a proposed windfall tax on oil companies, deriding it as a bad idea that would discourage investment in U.S. oil exploration.

Things worked out far differently in the GOP stronghold of Alaska, a state whose economic fate is closely tied to the oil industry.

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.

(Excerpt) Read more at seattletimes.nwsource.com ...


TOPICS: Constitution/Conservatism; Extended News; News/Current Events; Politics/Elections; US: Alaska
KEYWORDS: 2008; 2008veep; alaskaoil; barracuda; election; elections; energy; energypolicy; govwatch; mccainlist; mccaintruthfile; mcpalin; mcqueeg; palin; palinoil; taxes; thebad
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To: AndyJackson
What if the minerals were discovered on public property? Should the public give it away, or act just like a private citizen would do - lease or sell the rights in return for some reasonable fraction of the revenue stream?

The rights should be auctioned to establish property rights. Public control of private property rights results in inefficient usage of resources. The public has no investment in the resources. Politicians will invoke class warfare and other rhetoric to skew resource usage.

Owners of the mineral rights will certainly be subject to taxation like other owners of property rights. Income, sales, inventory, property, and other taxes can be assessed. The level of taxation is always an issue. Excessive taxation will lower production, increase costs, and lower employment.

A similar situtation exists with radio frequencies. The frequencies should be auctioned to create true property rights. Instead, we have politicians threatening to impose Draconian regulations (Fairness Doctrine) that will stymie the medium.

81 posted on 09/01/2008 9:30:00 PM PDT by businessprofessor
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To: AndyJackson
Actually, I take back all of my previous posts to you. Regardless of your screen name, you are apparently a clueless idiot.

Instead of refuting my arguments, you can only provide tired, personal attacks. Where did you learn your brilliant argumentative skills?

You do not seem to understand private property rights. Public control does not equal private property rights. Property rights must be acquired by economic transactions. Owners of private property rights can sell their rights. Alaska residents do not own mineral rights. The state constitution stipulates political control of a valuable resource primarily as a tool to tax residents of other states.

I think that public control is appropriate for national monuments and parks in which resource usage is not an issue. I do not think that public control is appropriate for valuable resources such as mineral rights. The leasing of mineral rights in federal areas has made energy production into a political football with lowered energy production and increased energy prices.

82 posted on 09/01/2008 9:45:10 PM PDT by businessprofessor
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To: RushingWater

I don’t have the info in front of me, but I believe it will eventually come out that Palin was trying to wean Alaskans off of FEDERAL tax money.

The Feds were attaching all kinds of strings to the Bridge To Nowhere money, so she finally said “enough” and sent it where it would be more wisely used.

The oil and gas tax increase was to give Alaskans the ability to survive and prosper in an inhospitable place.


83 posted on 09/01/2008 9:55:35 PM PDT by Bryan24 (When in doubt, move to the right..........)
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To: AndyJackson
If incomes are up an demand is up you wouldn't squeel if a landlord raised rents. Well, by increasing the taxes on oil production that is exactly what the State of Alaska is doing.

Sorry, you are incorrect. That is a bad analogy, one is part of Free Enterprise, the other is a government agency.

I know one thing that is true, Reagan would not have agreed with you and it is a shame that on a Conservative site dedicated to decreasing the size and power of government we have people twisting increasing the power of government into an example of free enterprise.
84 posted on 09/01/2008 10:41:50 PM PDT by SoConPubbie (GOP: If you reward bad behavior all you get is more bad behavior.)
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To: businessprofessor

There is no arguing with an idiot who thinks that governments cannot own land and receive an income stream from the extraction of mineral wealth on that land.


85 posted on 09/02/2008 6:35:06 AM PDT by AndyJackson
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To: businessprofessor
The rights should be auctioned to establish property rights. Public control of private property rights results in inefficient usage of resources

What if the f'in land is owned by the f'in state. Or is it your argument that governments cannot own land, like capital buildings, national parks, military bases, etc. You really are a dimwit.

86 posted on 09/02/2008 6:37:26 AM PDT by AndyJackson
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To: SoConPubbie
Reagan would not have agreed with you

Reagan's first move was to sell off the national parks, national forests and BLM lands. Geez I forgot. You know what is funny. The group that went in big for privatization of government assets was the Clintons. Wanno know why? Bet you don't. It is because all the bottom feeding scum that hung around the Clinton administration saw an opportunity to take the public for a ride.

87 posted on 09/02/2008 6:39:56 AM PDT by AndyJackson
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To: businessprofessor
refuting my arguments

You don't make arguments - application of theoreticla arguments to a set of accepted facts to argue a conclusion. You just make childish dogmatic assertions like you have OD'd on Randian comic books. And yes, I am horrified that someone like you has a screenname suggesting that you are responsible for molding the minds of our youth.

88 posted on 09/02/2008 7:05:36 AM PDT by AndyJackson
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To: AndyJackson
You don't make arguments - application of theoreticla arguments to a set of accepted facts to argue a conclusion. You just make childish dogmatic assertions like you have OD'd on Randian comic books. And yes, I am horrified that someone like you has a screenname suggesting that you are responsible for molding the minds of our youth.

You are unable to make any argument except baseless personal attacks and non sensical statements. I will use your diatribe as an example to my daughters (11 and 9) about poor argumentative skills. Thanks for providing the example. To guide your challenged mind, here are the issues.

You are arguing for public control of vital revenue producing resources, in this case mineral rights. I think there is clear evidence that public control will often lead to less efficient usage of the resource. The resource will be less efficiently used because a monopoly (government) has control of the pricing. Without the market process to determine prices for mineral right usage, the price is arbitrarily set by the political process. In addition, the political process is subject to corruption and vote buying schemes. The political process has little interest in efficient resource usage.

I am arguing for private ownership of vital revenue producing resources, in this case mineral rights. Private ownership would be established by an auction with proceeds to government. The government could invest the auction proceeds to generate annual revenues. Private ownership would enable the market to determine prices for mineral rights. Mineral right prices would not be subject to the political process. Government would also derive tax revenue from normal taxing of economic activity produced by energy development.

Public control may provide more revenue to the state of Alaska. Alaskans think that they can easily force the rest of the country to pay higher energy prices. If there is competition in energy sources, Alaska will not be able to force the rest of the country to pay higher energy prices. Competition from other energy sources would lead to lower energy production in Alaska unless the leasing price was adjusted.

Alaska is not the only state that can play these energy games. If the rats allow more energy exploration, other states will use the Alaska approach. Other states will try to impose very high energy taxes paid mostly by residents of other states. The result will be a combination of higher energy prices or lower energy production.

Public control can be asserted for other resources besides mineral rights. Public control could be asserted for land. Instead of allowing private ownership, leases could be paid to the government. The price for leases would be controlled by government not the market so that the price would be set arbitrarily. One reason that public control is not asserted for land is that residents of other states cannot be forced to pay land taxes. Some countries (such as Mexico) have a variation on this theme in which non citizens cannot own land. Land must be leased from the government by foreigners.

In general, public control provides very inefficient usage of resources. For resources that are not revenue producing such as national parks, public control is preferred. For vital revenue producing resources, I think that private ownership is preferred. Perhaps you are an Alaska resident who has a narrow self interest. My only self interest is in efficient usage of resources balancing consumption and production.

89 posted on 09/02/2008 8:04:03 AM PDT by businessprofessor
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To: businessprofessor
One reason that public control is not asserted for land is that residents of other states cannot be forced to pay land taxes.

you are blathering.

90 posted on 09/02/2008 8:09:42 AM PDT by AndyJackson
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To: businessprofessor
I am arguing for private ownership of vital revenue producing resources, in this case mineral rights. Private ownership would be established by an auction with proceeds to government

So, now you have gotten down off your "law of economics" high horse and admit that you are merely advocating a particular postion. I don't know why auctioning the land or the rights is any different than leasing them, or taxing the revenue stream from them.

In fact, leases come in various forms, from conveyance of land and all rights for a period of time, to an agreement to share the revenue stream derived from the exploitation of the land (standard commercial leases for retail space work very much this way). It is exactly a mechanism to let the free market set the revenue each side derives from the exploitation of the property.

In this regard leases providing a precentage of the revenue stream and taxes taking a percentage of profits are not radically different.

Furthermore, why shouldn't natural resource companies pay the taxes to support Alaska infrastructure. They and their customers in the lower 48 are the beneficiaries of that infrastructure.

Of course, with your business professoriat you already know all of this and can explain it as well as anyone, and are just preying on the ignorance of others in an effor to pull a fast one - just like your socialist colleagues whose mode of argumentation you have adopted - yes another ad hominem directed against a fraud who should know better.

91 posted on 09/02/2008 8:19:45 AM PDT by AndyJackson
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To: businessprofessor

You seem to skip over the fact this was never privately owned land before. It was always governmently owned and no rights to privately owned land were taken as you previously claimed.


92 posted on 09/02/2008 8:35:19 AM PDT by thackney (life is fragile, handle with prayer)
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To: AndyJackson
So, now you have gotten down off your "law of economics" high horse and admit that you are merely advocating a particular postion. I don't know why auctioning the land or the rights is any different than leasing them, or taxing the revenue stream from them.

My arguments have not changed. I have argued the superiority of private property rights instead of public control. I prefer private property rights because private property rights promote efficient usage of resources. You may prefer public control because it maximizes revenue to Alaska residents by raising energy prices to others.

In fact, leases come in various forms, from conveyance of land and all rights for a period of time, to an agreement to share the revenue stream derived from the exploitation of the land (standard commercial leases for retail space work very much this way). It is exactly a mechanism to let the free market set the revenue each side derives from the exploitation of the property.

Yes I agree that leases can be made in many forms. The issue is not the form of leases. The issue is price setting. Public control and price setting is the opposite of prices determined through a market. You are incorrect in asserting that public control provides a market for lease prices. Private ownership of mineral rights provides a market to set prices. In Alaska, the price of mineral rights is set by the government not in negotiations with owners of mineral rights.

In this regard leases providing a precentage of the revenue stream and taxes taking a percentage of profits are not radically different.

I agree that the state of Alaska would derive tax revenues if mineral rights were auctioned. The nature of the tax revenue would be different and possibly lower. Alaska could impose a very high corporate income tax to achieve the same end. The corporate income tax would be imposed on all businesses however unless it was cleverly structured.

Furthermore, why shouldn't natural resource companies pay the taxes to support Alaska infrastructure. They and their customers in the lower 48 are the beneficiaries of that infrastructure.

You have revealed your objective. Your objective is revenue to the state of Alaska especially revenue provided by residents of other states not efficient usage of resources. Your argument is contradictory. The state of Alaska benefits from investment to support energy development. Private enterprises invest in infrastructure and employment to support energy development. I am not sure why residents of other states should pay Alaska for development that benefits Alaska. I acknowledge that Alaska has a right to assess taxes or fees to mitigate environmental damage or other negative side effects. Public control is not necessary to mitigate side effects.

Your infrastructure argument could be made for any business development in a state. You could argue that new businesses should pay extra taxes to support new schools and roads necessary to support new employees. Most states would not adopt this policy because it would discourage hiring and economic development. The difference in this situation is that energy companies can pass the costs to residents of other states. For other areas with strong competition, businesses would avoid states that assess high taxes.

Of course, with your business professoriat you already know all of this and can explain it as well as anyone, and are just preying on the ignorance of others in an effor to pull a fast one - just like your socialist colleagues whose mode of argumentation you have adopted - yes another ad hominem directed against a fraud who should know better.

There you go again with your baseless personal attacks. You are right that I have many (mostly) socialist collegues. My conservative view point is in a distinct minority even in a business school. I have no idea what you are talking about with adopting argumentation tactics of the left. A major tactic of the left is baseless personal attacks. You have repeatedly used that tactic. I have never personnally attacked you. I have attacked your arguments and style of arguments.

93 posted on 09/02/2008 9:08:25 AM PDT by businessprofessor
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To: businessprofessor
In Alaska, the price of mineral rights is set by the government not in negotiations with owners of mineral rights.

The sole owner of all the mineral rights that contribute payment to the resident's permanent fund is only state owned land. No private land, federal land or Native American community land or mineral rights contribute to this fund.

94 posted on 09/02/2008 9:19:15 AM PDT by thackney (life is fragile, handle with prayer)
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To: thackney
The sole owner of all the mineral rights that contribute payment to the resident's permanent fund is only state owned land. No private land, federal land or Native American community land or mineral rights contribute to this fund.

I agree. Alaska asserts public control of mineral rights, the opposite of private ownership. Alaska could auction the mineral rights and create private ownership. Public control is not the only option. Public control may be the only politically acceptable option because Alaskans want to maximize revenues from the mineral resources, not promote the most efficient usage of the resources. Without the ability to pass public lease costs to residents of other states, Alaskans would not want public control.

Alaskans are acting rationally in asserting public control. Public control is against the interests of residents of other states however. The Alaska model if adopted by other states may increase energy prices and lower energy production. I am arguing that public control is bad policy for the country, not Alaska.

Many other states and local governments try similar tactics to tax residents of other states (non voters) rather than taxing residents. The Alaska situation involves property rights but otherwise the tactics are similar. I live in a city of 14,000 that has annexed lots of commercial development. My city derives most of its revenue (sales taxes) from taxing residents of other cities. Consequently, I effectively pay negative city taxes (combination of sales and property taxes) because I receive lavish services (snow removal, free garbage collection, recreation reimbursement). My neighbors will not even question this practice. My city should either share the tax revenues or lower the sales tax rates. My neighbors like others to pay for their services. Meanwhile, adjacent (and much larger cities) are crying foul because my city takes so much sales tax revenue. Taxes of other cities are much higher to support the loss of sales tax revenue.

I am consistent in my beliefs here. I oppose these tactics to tax others even when I am a beneficiary. You should at least acknowledge that your preference is for your own interest, not in the interest of efficient resource usage and other parts of the country.

95 posted on 09/02/2008 9:53:05 AM PDT by businessprofessor
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To: businessprofessor
My conservative view

I disagree that that giving away natural resources on public land is a conservative view. It is crony capitalism of the form practiced the guilded age in the US and today in 3rd world African dictatorships where exploitation of resources by capitalist organizations is exceedingly efficient, at a cost of rather small side bets and payoffs to corrupt politicians. Coase explained it all.

96 posted on 09/02/2008 10:21:15 AM PDT by AndyJackson
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To: businessprofessor
Alaskans want to maximize revenues from the mineral resources, not promote the most efficient usage of the resources.

You call yourself a college proffessor and your write quibbling horsehockey like this. Maximizing revenues is what every for profit business in the country does. They don't care about "efficient usage of the resources" whatever that BS means. Every CEO who is not out there maximizing the revenue from his company gets his tail canned by his board.

You may be a business professor, but one thing is for sure, you have never tried to run a for profit business.

Only in a Dilbert world do you have committees sitting around all day asking whether we are maximizing the effiency of the exploitation of our xerox machine, or maximizing the efficient exploitation of our used coffee grounds or whatever. Every manages is expected to focus on maximizing revenue for the company. Efficient usage of the resources be damned.

And yes this is another ad hominem directed at an idiot who claims he is given charge of teaching our youth how to think, because I am appalled at the drivel that runs off your lower lip.

97 posted on 09/02/2008 10:36:13 AM PDT by AndyJackson
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To: businessprofessor
You should at least acknowledge that your preference is for your own interest, not in the interest of efficient resource usage and other parts of the country.

As I am no longer a resident of Alaska, this no longer is in my own self interest.

Neither did I promote this as a preferred ownership of land or mineral rights. I would rather both had greater private ownership in Alaska.

My point of posting was to correct your false claim the Alaska system was "legalized theft of private property." It was only public property distributed directly to the public rather than left completely in the hands of politicians.

98 posted on 09/02/2008 10:36:19 AM PDT by thackney (life is fragile, handle with prayer)
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To: AndyJackson
I disagree that that giving away natural resources on public land is a conservative view. It is crony capitalism of the form practiced the guilded age in the US and today in 3rd world African dictatorships where exploitation of resources by capitalist organizations is exceedingly efficient, at a cost of rather small side bets and payoffs to corrupt politicians. Coase explained it all.

I never said give away. An auction is not giving away the mineral rights. Auctions are not crony capitalism. The Alaska law is crony capitalism. The rat plans are crony capitalism. Establishing private property rights is the opposite of crony capitlism. The reason for corruption in Africa and other places is the absence of private property rights. Public control leads to corrupt practices and arbitrary pricing of resources.

99 posted on 09/02/2008 10:58:05 AM PDT by businessprofessor
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To: thackney
My point of posting was to correct your false claim the Alaska system was "legalized theft of private property." It was only public property distributed directly to the public rather than left completely in the hands of politicians.

Thanks for your clarification. You agree that public control is different than market control.

The Alaska law is mostly a non resident taxing scheme. Legalized theft involves excessive taxation. I believe this law also involves some excessive taxation on a select industry. The lease rates are set by political fiat (a monopoly) rather than through the market. To the extent that lease rates can be passed to the consumer, businesses will not care. I sense that energy companies are not happy with the lease rates and feel that some costs cannot be passed to the consumer at least in the short run.

You would probably agree that rat plans for a windfall profits tax are legalized theft. The Alaska law has a windfall profits tax element so I think that legalized theft applies somewhat to the Alaska law.

100 posted on 09/02/2008 11:20:05 AM PDT by businessprofessor
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