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GasBuddy News Article

Senators seek tax guarantee for when oil prices are low

Anchorage Daily News online -- By LISA DEMER
Anchorage Daily News

Published: February 25th, 2012 11:42 PM
Last Modified: February 25th, 2012 11:42 PM

JUNEAU -- The tax debate in the state Senate took a twist Saturday.

Some senators say if the Legislature rolls back the tax rate when oil prices are high, as oil companies and Gov. Sean Parnell want, it also should ensure the state gets a guaranteed minimal level of oil tax revenue when prices are low.

That's something the Legislature gave up in 2007 when it passed the current tax on oil profits, called Alaska's Clear and Equitable Share, or ACES.

The original idea pushed by then-Gov. Sarah Palin, set a floor or minimum tax, and the relationship between the lowest and highest tax rates was key, Palin told legislators.

"If one knob is turned, for example on lowering

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Submitted Feb 26, 2012 By: Nitewolf
Category: Daily News Article Discussions > Topics Add to favorite topics  
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Champion Author Oakland

Joined:Oct 2009
Message Posted: Feb 27, 2012 7:25:26 PM

Makes sense to me.
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Champion Author Atlanta

Joined:Oct 2008
Message Posted: Feb 27, 2012 7:04:05 AM

I believe this article is specific to Alaska and indicates what the state of Alaska wants to do...not what the federal gov't wants to do all over. And since I don't live in Alaska, I really got no dog in the race since I couldn't vote to agree or disagree with what they are doing up there. However I can still talk about my opinion on hte subject.

My concern (for those that care) is that gov't (local, state, or federal) should never tie its revenue rate inversely to the profit of bulk goods. For starters, it's not far from price-fixing. As the price of goods goes lower, the tax percentage goes higher. While this may stabilize the revenue stream to the gov't, it does not stabilize the income to the companies nor stabilize the price to the consumer. It's also a rather unfair way of taxation...taxing the industry hardest when its profits are lowest just seems wrong.

A better way is a flat tax added to the price similar to the way the federal gov't taxes gasoline. It's a straight 18.4 cents/gal regardless of what the price for gas is. This is far more stable and it doesn't cause the to-consumer price to inflate when the price of the good increases. Nor does it significantly cut state income when prices drop unexpectedly. The one negative to this method is that it assumes consumption will be relatively stable. If consumption falls off sharply (e.g. a big recession), then the gov't would loose revenue. But I believe it should. If the people are no longer working, there's less people to support the gov't. Therefore the gov't should also have to tighten its belt and cut its own spending. To me, that just seems like a better way of doing things.

[Edited by: cgrey8 at 2/27/2012 8:05:37 AM EST]
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All-Star Author Fort Wayne

Joined:Jan 2012
Message Posted: Feb 26, 2012 10:55:50 PM

Of course, they want a guarantee. Once Congress gets their hands on the money, they never intend to give it back in any way.
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Champion Author Denver

Joined:Oct 2010
Message Posted: Feb 26, 2012 9:13:30 PM

How about a guarantee Congress will stop screwing American citizens for their own personal gains?

[Edited by: Vetteblu at 2/26/2012 10:14:48 PM EST]
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Champion Author Dallas

Joined:Oct 2008
Message Posted: Feb 26, 2012 8:35:27 PM

dont say tax
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Champion Author Rochester

Joined:Jun 2008
Message Posted: Feb 26, 2012 7:22:44 PM

But don't ever ask the politicians for a guarantee.
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Champion Author Florida

Joined:Jan 2011
Message Posted: Feb 26, 2012 5:29:24 PM

Only if they take oil and gas off the futures market, cap prices, regulate the speculators and switch to algae-based bio-fuels.
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Champion Author Austin

Joined:Oct 2009
Message Posted: Feb 26, 2012 2:38:50 PM

really, really funny
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Champion Author Tallahassee

Joined:Nov 2011
Message Posted: Feb 26, 2012 2:00:01 PM

Government needs to take control of the price.
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Champion Author Indianapolis

Joined:Jul 2011
Message Posted: Feb 26, 2012 1:53:08 PM

and this is going to help how??? it just means more taxes, what do they think we are, ignorant of their schemes. I think not.
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Champion Author Winnipeg

Joined:Apr 2010
Message Posted: Feb 26, 2012 1:02:47 PM

I found this article to be interesting!
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Champion Author North Carolina

Joined:Jul 2011
Message Posted: Feb 26, 2012 12:56:16 PM

Think before you legislate.
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Champion Author Tennessee

Joined:Feb 2010
Message Posted: Feb 26, 2012 12:36:29 PM

I found this article to be interesting! definitely some credible points here!
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Champion Author British Columbia

Joined:Dec 2010
Message Posted: Feb 26, 2012 11:42:44 AM

Just charge a fixed amount per barrel or gallon and the problem is solved.
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Champion Author North Carolina

Joined:May 2011
Message Posted: Feb 26, 2012 11:42:30 AM

The local government and federal government are going to get some kick backs regardless of the price at the pumps. The main concern should be on lowering prices not wether or not taxes will be implied.
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