There is an old saying in politics, if it moves tax it, if it stops regulate it, and if it dies subsidize it. Another simple rule, if you want less of something - tax it. If you want more of something reduce the taxes on it.
Recently the Governor has supported tax reductions on oil production in Alaska. Some say there is no proof that giving subsidies or tax breaks will increase production.
"Sen. Bert Stedman, co-chair of the powerful Senate Finance Committee, said he doesn't believe that lawmakers have all the information they need to make a sound policy decision.
Among other things, he said there's a lack of available information on how existing tax credits are being used."
Rep. Les Gara, D-Anchorage, said that if the bill passes, it will likely be "the biggest economic catastrophe in the state of Alaska since the Exxon Valdez." He called it a recipe for damaging the state's economy.
"Senate President Gary Stevens said the administration hasn't done a good job justifying the need to change the tax structure. He said there's also been a disconcerting lack of assurances from industry that they'll invest more if taxes are cut."
I can keep pulling quotes, but you get the idea. Now Senators, lets remember that oil companies like to make money. They will pay you a fair portion of that money, if it lets them make money. Right now the Governor is having Alaska compared by the majors to say "Algeria" where the taxes are low and the profits are high. If you want Exxon to invest in Alaska your tax regime has to measure up.
Now lets look at how the ACES program is going. You offer the tax incentives for exploration and low and behold explorers come to Alaska. Once the taxes are capped on production the producers will work very hard to get their production up over the cap and take well deserved profits home.
To suggest that the oil companies will not take the opportunity to be successful is simply unAmerican. I will say this, a progressive tax that makes the more you produce the more you pay in taxes is a sure fired way to have less production. Oh wait a minute, that is what is happening.
If the Alaska Senate can't get their arms around that concept then it is time to go back to school, or at least take an economics course.
Governor Parnell, you need to keep pushing on this and I for one will continue to vote for you and your followers. In Alaska we need oil, we need natural gas, we don't need higher taxes.