Posted on 08/22/2011 8:17:41 AM PDT by The Bronze Titan
Oil companies in Alaska are paying more money in taxes than ever before. The state's oil and gas tax revenues for its just-ended fiscal 2007 topped $10 billion. That's twice as much as fiscal 2006 and four times more than 2004. Some supporters of Barack Obama see that money coming in and say that John McCain's running mate, Alaska Gov. Sarah Palin, must have done what Sen. Obama wants to do -- sock those companies with a big fat windfall profit tax. This is a deeply misleading reading of her 2007 tax reform.
...continued HERE.
(Excerpt) Read more at online.wsj.com ...
I find it hard to believe Free Republic as a rule is in favor of this sort of thing...but you make a decent point ..they have little refining cap there
"The Alaska Permanent Fund is a constitutionally authorized appropriation of oil revenues, established by voters in 1976 to manage a surplus in state petroleum revenues from oil, largely in anticipation of same from the recently constructed Trans-Alaska Pipeline System. The fund was originally proposed by Governor Keith Miller on the eve of the 1969 Prudhoe Bay lease sale, out of fear that the legislature would spend the entire proceeds of the sale (which amounted to $900 million (US)) at once, and was later championed by Governor Jay Hammond and Kenai state representative Hugh Malone. It has served as an attractive political prospect ever since, diverting revenues which would normally be deposited into the general fund."
That said, the state taxes companies, the money taxed and collected by state force is redistributed to Alaskan residents.
Doesn't sound conservative...
We hear this all the time in Pennsylvania because our Governor will not sign an extraction tax on shale gas. The Liberals always shoot back with “Well....your hero Sarah Palin imposed one in Alaska, and you wouldn’t call HER a Socialist, would you?”
... that said, send me a check too!
Taxing shale gas right now would stymie further development over the next year or two because prices are so low - note that a tax akin to Palin's gas tax would not kick in at these prices.
The state's workers need the drilling jobs more than the state goverment needs the taxes - but try telling the lib morons in Harrisburg that.
And even less distribution infrastructure.
Nothing personal but if Chevron spent the money to extract the oil I have no issue with them or their stockholders as billionaires.
It's a quandry...give cash or cut state budget taxation needs...I prefer the latter...I simply think handouts..to people or business are a bad idea generally.
I think Alaska started this for two reasons:
Huge Indian population that had a reasonable interest in the land their ancestors once roamed and folks figured this was a decent distribution to them...they may get additional on reservations like the Navajo and Hopi do And I think it was an incentive to bring in more workers they needed when the boom took off...it's hard to say..it's not an enormous amount of money...less than an unearned income refund
Texas, Oklahoma and Louisiana all have had major oil and gas plays and to my knowledge they never gave out annual cash to folks who lived there for the minimum year with no felonies
I agree with hosepipe though...better to have state control than federal usually...for a myriad of reasons...all of which tilt right..Good Lord for Obama and Bent One grabbed land..whew
At the link it gives those details on how much is paid out to citizens of Alaska. Their oil revenue is so huge and their population relatively small, so they are all getting a nice chunk of the oil wealth, plus I think it finances most state government programs. A deal no other state has that I know of.
If your family owned a piece of land and someone found gold on that land. You then gave that person the right to dig for gold because they had the expertise and equipment. Would you and your family just give that gold to that person or would you, because you owned the land and the gold under it, expect part of the profits from that gold? Would you consider it socialism if each of the family partners who were co owners of that land received a portion of those profits?
This is the only thing that would make me into a rabid Sarah Palin Supporter.
I already love her.
Good grief people. It’s not “companies that do business there”. The oil companies are taking state owned (ie people of Alaska) resources and extracting them for a profit. Would you expect part of the profits of gold that came from you land even though someone else with the equipment and expertise was allowed to dig it up? It’s not the same as a company that buys raw materials and makes a product for resale.
Not a correct description. Alaska owns the minerals. In oil and gas, royalties from the production of minerals are collected just like if I collected royalties from my privately owned mineral rights in Texas.
In Alaska, they are owned jointly, no private ownership of minerals, although the Native Groups own their minerals rights (collectively by group) and the Feds own theirs. Governor Palin did not change this.
What she put in places was ACES, a tax on the profit after royalties and other approved expenses are paid. There was a profit tax before Gov. Palin; this is not new. She changed the structure and increased the rate. This tax is not redistributed but only used for state government.
What part of taxes isnt? By your standards, the whole world for all history is socialist! I really do not understand when people get a direct tax cut based on surplus income to the government people freak out. You are fine with it if the people dont get a percentage of the windfall from mineral wealth, you only get freaked out when the people do?
Trust me, there are plenty of government bean counters that would love to do away with that check. Why then we in alaska could count tree toed frogs, if we could find thawed ones that is.
Several points to consider when interjecting "Alaska Oil" and "Sarah Palin"...
- Sarah Palin single-handedly took a confirmed "corrupt" state industry (comprised of capitalist and government forces), and turned it on it's head by reforming it's revenue structure and providing public transparency to be benefit of it's citizens. That cannot be disputed.
- Sarah Palin took this effort in the right direction. The legislation as "ACES". Was it "PERFECT"? No, because nothing in this world is (except the exceptional "Diamond"). But, she she did REVERSE THINGS in the right direction as far as it was politically possible.
- The "ALASKA CONSTITUTION" (unlike those of other states) proclaims the "oil" (i.e. "minerals") to be the property of the State/Citizens. This makes the STATE/CITIZENS the "OWNER" of the oil (Mineral), and so they become the "SELLER" of this oil. As the "Seller" they (STATE) get to decide "WHO" they sell to (Leases) and "HOW MUCH" to charge (call them "Fees", "Taxes", "Charges" less "Credits", "Tax Breaks", etc...), and to what "END" they apply these "REVENUES" (Dividend Checks / Savings applied to future obligations "DEBT", etc...).
- As the "OWNER" of this Oil, the STATE needs to make sure that they get the best return on their ASSET, but at the same time being mindful that you need to have competitive incentives for private industry to INVEST and DEVELOP this resource for the longterm. This is what the current debate is about. See the Report just commissioned this year issued by 'Commonwealth North'.
This could be off, but the way I understand it is.
If oil is say $120 a barrel that means there isn’t a large supply, someone is not producing and the tax rate is high (under ACES). Before ACES that was an incentive to not produce, keep the price of a barrel high keeping profits high.
Now under ACES there is an incentive to produce more, drill in leases that they have been holding and sitting on. The more they drill and produce the more the price of a barrel drops. As the price of a barrel drops the tax rate drops. Everyone makes more money when the taxes drop, that is the whole point in the deal.
The smartness in this is that oil companies make more money the lower the price of oil is instead of the higher it is. The higher the price (of oil) is the more we (the public) get screwed at the pumps.
Meant to also ping you to #75.
I was recently at a shale gas event here in PA that had lots of Democrat politicians hanging around. And I literally have never seen so many dollar signs cha-ching-ching-chinging around in people’s eyes before.
Their environmentalist buddies are useful idiots. Ten seconds after they find a way to bluff Corbett into taxing this gas the enviros are goin’ under the bus.
We know the oil is there and its a vast resource. We know that developing it is not a mom and pop operation, however mom and pop own it. How do we bridge the gap? We need the oil, but is it fair to take the only resource Alaska has from the Alaskans and just give it lock stock and barrel over to a for profit company? This is not about wealth redistribution, for to give up the oil to company and not make that company pay a cost for the oil lease would be to steal all the wealth from mom and pop.
So, for longer than America has been a nation, the system of Royalties came to be. (The name is a clue) It says, hey, I got a gold mine here, you are a gold miner, if you want to lease the land from me and give me a portion of the gold, then we got a deal. The gold miner is happy, because he moves in and builds a mine and makes profits, the owner of the land is happy, because he is getting some of the gold.
In the case of Alaska, the people OWN the mineral rights, not the GOVERNMENT or the OIL COMPANIES. So in the long run, if you do not cut a check to the actual owner there is this little law thing that kicks in about theft of properties without fair compensation. So the PFD has more than one purpose. Fair is decided by the government and means that mom gets a penny, Pop gets a penny, the Governor gets a buck and the oil company gets a buck.
Please do not forget that MOM and POP own the oil. Now you can argue what is fair till the cows come home, but the bottom line is, who owns it and who is getting paid.
This is not a tax for redistribution scheme, this is a royalty payment that is governed by the government. When it is all over, the gas companies make record revenues larger than most third world countries, the government has a multi BILLION dollar budget paid for and Alaskans get 1200 bucks.
Want to be real conservative? Cut the government out of the deal. They are the redistribution part of the tax, not the PFD.
You own a gold mine, the government decides to manage it for you and sells the rights to someone else saying it would be socialist if we gave you money.
They would be right, they would also be Fascist. Somehow I think that is not a step in the right direction.
-”Her plan includes an escalator clause that gives the state a larger share of revenues when oil prices rise. This is common to production-sharing agreements all over the world.”
Rabid yet?
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