And do you understand that if the governor raises taxes too high then the checks going out to people are going to go down?
This is different than telling people that they’ll have to fire teachers and firefighters, or that they streets will be less safe.
If it is cheaper for the oil companies to develop fields in places other than Alaska, then they will do that, and those checks will go down.
If, however, the oil company is squeezing their partner, as oil companies are sometimes wont to do, then their bluff will be called and they will stay.
Shell sent an ‘expert’ out from the UK on the price of water in order to make a case to a local WA mayor on getting a cut in the rate. The rate was already the lowest in the US, but they sent someone out to ask anyway.
After three days, and threats that they could build a refinery elsewhere (the Mayor laughed the guy out of the room, since his dad used to manage the plant in question and knew a little something about getting an EPA air permit in the US), the wormy little Brit ended the visit with, “Please don’t send me back empty handed. Can we get just a token cut in the rate?”
Either the tax is too high, or the oil companies have the opportunity to develop fields cheaper in other places. Since there are now incentives on ALL SIDES (company, taxpayer, and government) I have faith that the market there will find the right price.
I’ll tell you this. The government’s interests and the taxpayers interests are not aligned here. If this were any other state, that alignment would be irrelevent, but it isn’t here.
Here in WA state, they just tax you out of business and nobody sheds a tear. Boeing is gone. Once the 787 is up in SC, they will produce government aircraft here in this state and send all their commercial stuff to right-to-work states.
In AK, the taxpayer is also a shareholder receiving a dividend.
Can government screw it up in AK? Absolutely. I just think it will be a little harder than in other states.
The current Governor is trying to lower the taxes, not raise them.
The checks to the people are not from the taxes but the royalties. The royalty payment was not changed under Governor Palin. ACES changed the tax rate after royalties are paid.
Either the tax is too high, or the oil companies have the opportunity to develop fields cheaper in other places.
That is what happened. After ACES went into effect, projects were canceled, investment capital was reduced and other areas like Canada, Texas and North Dakota gained investment dollars from the same companies. People like me in the Alaska oil patch left for other location more inclined to work with business instead of trying to choke the golden goose.
In AK, the taxpayer is also a shareholder receiving a dividend.
Don't confuse the royalties with Taxes. They do effect each other, but the tax is not distributed.