Posted on 08/12/2008 10:41:19 AM PDT by Turret Gunner A20
Do you want to hear the truth about those evil oil companies? You know ... the evil corporations that some Democrats and most socialists will tell you should not even be allowed to make a profit? Well the state of Alaska has found a way to take care of that .... tax the hell out of them.
Last year, Alaska's legislature approved a major increase on those popular-with-the-government-educated-set windfall profits on the oil industry. And guess who is profiting ... the government.
When it comes down to it, the state of Alaska has received more than $10 billion this year from oil revenue. Thanks to the addition of these new taxes (on top of the taxes already in place), that is double the amount it received the year before. Now the government's biggest problem ... trying to figure out how to spend the money.
The first idea on how to spend the money comes from Alaska's governor Sarah Palin. Her administration last week got approval for a government program that gives $1,200 to every single Alaskan to help them pay for gas. But that's not all. On top of that, each resident will receive their annual dividend of $2,000 from an oil-wealth savings account.
Can you guess what was fueling this windfall profit tax? Wealth envy. State Senator Hollis French (a Democrat) says that the oil companies " ... were literally printing money on the North Slope. We decided to strike the balance a little bit more on our side." That's a fancy way of describing wealth redistribution. This is not something that should happen in a free enterprise economy. This IS something that will happen in a country with a state-run economy.
Naturally, the oil industry says that the new taxes are already discouraging future exploration and development .... this is exactly opposite of what we currently need in this country.
At a time when Republicans in Washington are debating about ways to get us out of this mess, the state of Alaska thinks it would be a great idea to tax the companies to death while stifling the very development we need.
Marilyn Crockett, executive director of the Alaska Oil and Gas Association, says that "clearly, from the investor standpoint, Alaska has become a less attractive place to invest exploration and production dollars." So they know what the effects are ... and yet they are still doing it!
BP Alaska has already delayed development in the western region of the North Slope solely because of these new taxes. In fact, BP Alaska paid more than $500 million in taxes to Alaska last quarter. That is far more than the company earned in profits from the oil. Or take a look at ConocoPhillips, which scrapped a $300 million refinery project ... because of the new taxes.
When it comes right down to it, the state of Alaska gets $49 of every $120 barrel of oil ... not counting other fees. ConocoPhillips says that once royalty payments and other taxes are added in, the state of Alaska gets 75% of the value of every barrel of oil.
Hmmmmm...glad you posted this! I don’t think I like the idea of Palin being McCain’s veep!
Clarification: The fuel bonus only goes to those Alaskans who were counted as citizens last year for the payment they get every year. So, I know of at least 3 Alaskans who won't be getting the $.
Government...local, state or federal just doesn't get it. And people wonder why corporations and the jobs they provide are leaving this country as fast as they can. Then the dumbsh!ts who enact the taxes have the nerve to say...whoa wait a minute you can't leave...we need those taxes! More proof that liberalism is a mental disorder of the highest caliber!
That might be fine, but you have to understand what you are doing when you increase unnecessarily the cost of production. Are you trying to encourage production, or discourage it? Its never free money, even if it looks like it.
Or take a look at ConocoPhillips, which scrapped a $300 million refinery project ... because of the new taxes.
Alaska could charge a little less, and over the long run collect far more. Or they could charge more and get nothing.
A slightly different take... CA charges sales tax on each dollar of gasoline/diesel sold ... 7.75% ... I don’t think the CA govt cares how high the price is...
Check this out: http://www.freerepublic.com/focus/f-news/2060605/posts.
Forget about government and “Big Oil”. I’m worried about government and “Big Wind Farm”.
This tax is legalized theft. The state of Alaska has made its residents partners in the oil exploration business. Residents do not need to make any investments or bear any risk. The oil companies just need to distribute the proceeds. The rats propose the same legalized theft (windfall profits tax) except that they will only distribute the funds to certain favored groups.
We are approaching the point in which property rights are a mirage. No one will want the property rights because others will just plunder your property without recourse. This plunder of the energy business will decrease production, increase energy prices, discourage investment in the energy business, and lower returns for pension funds and other investors.
Shame on Sarah Palin for defending such a scheme. She is unfit to be the VP candidate.
We have been paying the most money for fuel than antwhere in the nation for a while now. I filled up for $4.32 2 days ago. How about you? Fuel oil is $4.55, how about yours? I also jokingly say there is a criminal conspiracy going on with the rates charged for shipping and for virtually any communication form. We pay far more than anyone else in the nation. I still love it here and beyond my beloved Iowa farm land, I wouldn’t live anywhere else. And yes, the oil companies are getting ripped off. I would rather have no oil money and live cheaper. Come on up and live here before you bellyache!
Alaska --Severance Tax: Governor Signs Petroleum Profits Tax LegislationCCH (cch.taxgroup.com) reports:The base tax rate is increased from 22.5% to 25% of the annual production tax value of taxable oil and gas. When a producer's average monthly production tax value per BTU equivalent barrel of taxable oil and gas is between $30 and $92.50, an additional tax of 0.4% is imposed on the difference between the average monthly production tax value and $30. Formerly, the additional tax was 0.25%. When a producer's average monthly production tax value exceeds $92.50, the additional tax is 0.1% of the difference between the monthly production tax value and $92.50. The new tax rates are effective July 1, 2007.
The Palin administration says its tax plan would place Alaska about average worldwide in terms of government take.
That's also the opinion of Pedro van Meurs, an international tax consultant and a key adviser to former Gov. Frank Murkowski on last year's oil tax change.
Last week, van Meurs recommended that lawmakers not change the tax until 2011, when the law calls for a review. However, he also said Palin's proposal to raise the tax rate from 22.5 percent of oil company profits to 25 percent fits with what he recommended to Murkowski last year.
"That is perfect as far as I'm concerned," van Meurs said.
...
After past oil tax hikes in Alaska, oil companies sometimes reacted by axing planned drilling or other work, only to relent and go ahead with the projects later.
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