They actually get a check at times if I am not mistaken..at least they claim it on Alaska boards. Are we advocating that on a conservative forum. I have serious hesitation about that. Taxing business to hand out cash to folks.
Taxing them for infrastructure improvements necessary for the increases in population they bring is good but just handing out money is problematic to me and yes I am aware that she didn't start that....it started as some Dividend Fund...35 years ago...
Let's see ...what do reasonable folks here think..should local government tax businesses and give part of that money to the local population as cash? Does any other state do this?
One could argue that it's better to do that than have the govt waste it on BS...it's pretty nuanced question. It can breed dependence or it could be used to reduce taxation on citizens.
I do not know what state and local taxes Alaska has...once upon a time when Texas was oil and gas rich and in production and the Texas Railroad Commission which governed it was bringing in so much royalty revenue to the state that Texas had virtually no statewide tax.
The oil rights belong to the people of Alaska. When prices are high, they pay an even higher rate for energy than folks in the lower 48. This tax plan provides balance.
It doesn’t make sense to me.
The rationale (as I understand it) is that the people of Alaska own the resources and therefore the extraction companies owe them a royalty on those resources upon extraction.
But this doesn’t make sense to me, because when the resources are gone, what do future Alaskans own? Why do people own the resources just because they happen to live in that State precisely now as a point in time? Who owned the resources before? The Inuit?
If anything, the taxes collected should be put in a ‘lockbox’ for future generations ... but even that is supect.
There is nothing wrong in charging industries for resources. Do you think they should get it for free if the citizens own the resources? This is pure capitalism at its finest.
Pray for America
In principle I am against this approach.
It is a bottomless slippery slope. If it is OK to tax (confiscate) one sector and simply hand the money over to another, where does it stop? Why don’t the recipients simply vote to raise the tax level and award themselves even more money?
Is this really any different than the liberal “tax the evil rich and give to the virtuous poor”?
Can people envision the near limitless ways this could be applied? Like all government giveaways, it’s great if you are the recipient, bad if you are the involuntary donor.
This could be applied to any industry that could be painted as doing nothing for its profits. Which is pretty much everything as far as libs/socialists are concerned.
It’s pure socialist redistribution at its finest.
“They actually get a check at times if I am not mistaken..at least they claim it on Alaska boards. Are we advocating that on a conservative forum. I have serious hesitation about that. Taxing business to hand out cash to folks.”
So, each alaskan receives a cut of the taxes generated from companies that do business there?
The State collects the taxes and redistributes them to citizens?
The citizens get the money just because they live there? They don’t do anything to earn them?
How is this conservative?
This money is from the mineral wealth of the land, something that is owned by the people. And up here in Alaska, mineral wealth is all you have. You cant grow crops, or make lumber, if it ain't mined it just ain't.
How do you share the mineral wealth? Do you just hand the oil over to chevron and say good luck guys? Have a nice life as billionaires? Do you tax them and build roads and schools? Well then, how much do you tax? Do you just say to the government, good luck guys, have a nice life as millionaires and throw us a school or something once and a while?
How about we let the people decide on what to do with 1% of the money taken in! Perhaps people know best what they personally need to survive in this harsh climate. So the Dividend fund came to be. It was done back in the day when people did not trust government as much as we seem to do now.
Might I ask, just how is that hopey changey thing doing down there in the lower 48? Think you might know how to spend your taxes wiser than Obama? Not interested in the mating life of three toed frogs but do want to pay your doctor bills?
In Alaska they know that true stimulus is not having the government spend every dime in everyones pockets.
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.
This is an excellent point of discussion and debate. So refreshing to see it.
Paying a state resident for oil revenues seems to me an excellent idea, and consistent with capitalism, if you look at oil in terms of who owns it when its in the ground.
It’s not a stretch to look at oil as something different than something like owning forest land or farm land. Oil’s generally down there pretty deep. To say one ‘owns’ an oil well because you happen to own a parcel over a resevoir of it that may cover 1000’s of square miles is something I have an issue with.
It made sense when we were developing oil in the early days of the industry, but we know more now. In fact, its down so deep we know it could NOT have come from rotting dinosaurs and mesozoic plant life, et. al. If the state allowed oil companies to access the resource, and it was something every LEGAL CITIZEN of the state could have a share in, I think the costs to the oil companies would still be less than developing such resources in hostile foreign countries and then shipping it here.
In fact, we currently subsidize the defense of such assets right now protecting such interests in those same ‘partner countries’. If those assets should be destroyed or damaged, the current policy is that the cost of replacement is guaranteed by the taxpayers.
The oil company, through its private development and refinement of extraction technologies and processes is entitled to what they are getting in profit. However, if the oil extracted domestically can’t be looked at as a resource rightfully belonging to the citizens of that state, at least in part, then I don’t know what is?
I know that water is increaingly being looked at in a similar fashion, and it is already well established that one man drilling a water well on one piece of land and over extracting from it adversely effects other landowners in the area.
Palin not only gave the oil companies incentive to MAXIMIZE their extraction in Alaska, she argued that maintaining the average Alaskan as a permanent stakeholder would reduce their companies expenses in the medium and long term AND give the companies a willing laboratory for better future extraction techniques.
If more states went to the Alaska model, you’d have fewer envirowhackos prevailing in those states. Go to any refinery town and start pissing on about how ‘burning dead dinosaurs is so dirty and so yesterday’. You won’t find many sympathetic ears.
Colorado is especially critical in this regard. They not only hold shale and coal resources on par with most oil nations, they also have much of the worlds proven Thorium, and a great deal of the world’s proven Uranium.
None of it is coming out of the ground because the average citizen doesn’t have a stake in it. Were the governor there go to the Alaskan model at this opportune moment in economic history, I think he’d have allies from all stripes - oil companies, mining companies, unions, D’s, R’s - everyone but the greenies, and they are wearing out their welcome everywhere.
You just have to agree that the resources have to be developed by US interests, or foreign companies with US ownership above some acceptible percent. Each state can agree to its own terms.
The other thing that HAS to end, however, is the great US federal land grab. Turn that all back over to the states and let them go to market as they are wont to. The winners and the losers will sort themselves out.
Great topic.
We're mixing apples and oranges when we trying to compare or apply similar thinking from the "Alaska Oil" situation to other businesses elsewhere in terms of the issue of a 'tax'
Alaska (the State/Citizens) "owns" the oil. They (the State/Citizens) are the "Seller". They (the State/Citizens) are entitled to a "profit" (revenue) from the removal/use of this asset, it's not a "tax" when you own something. It's no more of a "tax" than if you were mining gold (that I own) out of my back yard and I charge you for that gold under a "revenue agreement".
Now, when government starts charging YOU for something they don't own, that is a "TAX"!
The challenge for Alaska is to devise a workable and competitive revenue formula where it becomes a 'win-win' for both Alaska and the private investor/developer of the oil.
It’s a royalty check. Read the AK Constitution. The people of Alaska OWN the oil, and the gold, and all the other valuable minerals in THEIR State.
And the payout is tied to production. No production, no payout. High production, high payout, low production, low payout. At least that’s my understanding of how it works.
This is a state issue. If Alaskans do NOT want this, then they are free to elect representatives to repeal/change that law. As a resident of Texas, I have ZERO say in what Alaska does.
Personally, I think it's a good idea for the state to direct these funds to individuals rather than to use those funds for congresscritters' pet projects.