Editorials

"An Informed Voter Is The Best Defense Against Bad Government"

"Windfall Oil Tax Hike"

By John J. Kiernan, May 2, 2004

 
Since we the people of Alaska own the oil and the price today yields huge 
profits to the oil companies, let's tax the oil companies and get the
governor's and legislators' fingers out of the Permanent Fund!  New Oil Tax
Rates, if set to take effect by August 1, could work on a sliding scale that
hands the state the lion's share of any gains in the oil price over $15 per
barrel.

 Below $15 a barrel: No new tax.
 $15-20 a barrel: 35 percent of market price minus $15.
 $20-25 a barrel: 45 percent of market price minus $20.
 Over $25 a barrel: 65 percent of market price minus $25.
 Over $30 a barrel: 75 percent of market price minus $30.
 Over $35 a barrel: 85 percent of market price minus $35.

 Oil Tax Price Added Revenues, Annual Impact on Budget:
 $15  Zero
 $20  +$110 million
 $25  +$1.122 billion
 $30  +$3.265 billion
 $35  +$6.555 billion

Oil firms get rich off our crude. The companies would still be generating
huge profits. The additional windfall state revenue could be split 50% into
the budget and 50% into the Permanent Fund.

Then, when there is no more oil, we can begin to think about using earnings
from a Permanent Fund that can support the state. This is not our rainy day.

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