Sarah Palin’s Alaska – Would the Tea Party Like It? | ChuckHuckaby.com

Sarah Palin’s Alaska – Would the Tea Party Like It? | ChuckHuckaby.com.

I'm quoting the first part of this blog post, which I thought pretty good:

This blog post is about tax policies in Sarah Palin’s Alaska, not the TV show by that name.

As I looked at the tax policies at work in Alaska, I began to wonder if the Tea Party who responds so favorably to Sarah Palin would like her to implement the tax policies in Alaska for the rest of the United States of America? (However unlikely that prospect is at the moment given our present tax paradigm.)

Why might there be problems taking a lead from Sarah Palin’s Alaska? Once you learn how great the tax principles are in Alaska, you’ll realize there are bound to be very powerful vested interests who would like to keep the rest of us from going in that direction, if only out of the fear of change or their loss of power and revenue. Big Oil who wants to profit from nature’s bounty while paying as few taxes as possible is one potential opponent. And those who want to use the income tax code to manipulate society would also oppose such a transition.

I hope America’s Tea Parties will get to know about the tax structure in Alaska… In fact I wish all America had the same basic setup!

Here’s how things work in Alaska:

According to Wikipdedia, Alaska (yes, I know they are often unreliable but useful enough for this post) has the lowest personal tax burden of any state. That is confirmed by the Tax Foundation article on Alaska Taxes which has other information on their taxes. Both sources rate the state as extremely “Business Friendly” tax wise also.

How do they do this?  Good question.

Alaska has:

• No State Income Tax
• No State Sales Tax (though some local governments do have such a tax…

But they DO have…

• Royalties charged on natural resources
• State and local property taxes, and they receive
• Federal subsidies – $1.84 for every $1.00 in federal taxes.

It wasn’t always this way in Sarah Palin’s Alaska: Before 1977  Alaska had the second highest tax burden in the country prior to finishing the Trans-Alaska oil pipeline. Then, as recorded at the Tax Foundation “By 1980, with oil tax revenue a certified bonanza, Alaska repealed its personal income tax and started sending out checks instead. The tax burden plummeted, and now Alaskans are the least taxed.”

Those checks come from the Alaska Permanent Fund that sends annual dividend checks to every permanent Alaska resident regardless of age. A family of 5 would receive 5 such checks annually. Checks have averaged between $ 1,000 and $2,000. To receive a check as a permanent resident one must reside there from January to January in the qualifying year and receive the dividend check the following October.

The Permanent Fund – and State Government – are funded by royalties on petroleum production.  (As noted above, land taxes also form some part of the State revenues.)

Except for the Federal subsidies (and I don’t know how much of that goes to military spending), what we see is a tax structure in Alaska similar to one described by Henry George, one of America’s best loved economists. A summary of George’s thought is available in this modern updating of his book Progress and Poverty.

Alaska Government  is primarily funded by revenues from what God has created and which people seek to monopolize for themselves (land, minerals, and other natural resource). The “rents” from these gifts of God pay for the government and pay back a basic “dividend” or income to the residents. Best of all,  the system allows the people to live without having to pay “income” or “sales” taxes that are a drag on economic growth.

Of course folks in Sarah Palin’s Alaska have to pay Federal income taxes – but in theory, those revenues could be derived without income taxes either. How could this be implemented in the “Lower 48″?

1. “Drill, Baby, Drill!” Tap into the onshore and off shore oil reserves and natural gas (not to mention coal) that we know exist and divert royalty revenues to fund government. (And defund overseas petroleum providers who fund terrorism along the way!)
2. Shift to a land value tax (on the “rental” value of land, not the improvements) and natural resources harvested for resale to round out the income needs of local, state, and federal governments (this is an idea endorsed by the Articles of Confederation Article VIII
3. Use the revenues to eliminate personal income taxes and eliminate sales taxes.
4. To expand on the definition of “natural resources”, that means tax the value of those things which the classical economists would have recognized as land, i.e. water rights, mineral rights, the “right” to pollute, access to “airwaves”, geosynchronous orbits, and other God given uses of the earth that private individuals and corporations presently claim for themselves at our expense and for their profit.
5. Create dividends for permanent, legal residents while building emergency reserves based on real assets.

I’d like to see the Georgist tax policies of Sarah Palin’s Alaska applied to the “lower 48″. Eliminating personal income and sales taxes would go a long way towards making all of the United States a “business friendly” area and should, accordingly, draw investment and spawn productivity by businesses of every size.

There’s just one thing. While I really like the tax policies of Sarah Palin’s Alaska, I wonder why I’ve never heard her mention “exporting” them down here?

Why tinker with simply lowering personal income tax rates? I’ve discussed here why that’s wrong.

Flat taxes, “Fair” taxes (national sales taxes), income taxes, etc. are all just ways the people with means, lawyers, and lobbyists cash in on the benefits of God’s creation for themselves while shifting the costs to the rest of us.

As far as I’m concerned, the Tea Party is settling for too little unless they seek a major overhaul of the way we do taxes in our nation.

Let’s eliminate personal income taxes completely just like Alaska did.  Let’s switch to a completely different tax system on the same principles that Alaska uses. That’s the most valuable gift the rest of America could receive from Sarah Palin’s Alaska!

Along the way, I believe we’d see prosperity flourish wherever people were willing to work. Isn’t that what America is about?

Comments

[Chuck Huckaby]

Thanks for reposting!

Chuck
ChuckHuckaby.com