Wednesday, March 23, 2011

Alaska Oil Tax Bill, HB110

Since having kids I haven't been as up on political issues as I have in the past. Today I got an email from my representative asking for support for the Governor's Oil Tax Bill HB 110. This bill would give 2 billion per year back to oil companies. That is 2 billion dollars of tax revenue that Alaska needs going to oil companies who make record profits.

 I don't support tax breaks for oil companies. They already pay less taxes than other companies and get money for exploration and development. We also pay for roads but do not support public transportation. Alaska is one of 3 states that does not provide any money for public transportation. Oil is a non renewable resource. We need to reduce our use of it and we will not do that by giving tax breaks to oil companies that make record profits. If we focused the money that we spend on tax breaks to oil companies on building sustainable smart growth cities and public transportation we wouldn't be so dependent on oil. Instead we built sprawlzilla communities that are heavily dependent on automobile travel and we are not prepared for the future like many other industrialized nations are doing. We need to build communities not roads.

Here is the letter I am sending to the representatives, the senators and the Governor

I do not support the oil tax bill HB 110. We do no need to lose 2 billion in state revenue for a program that "might" pay off down the road with more oil production. Trickle-down economics is a failed theory that does not work. It is not supported by the majority of economists. 

The oil industry already receives tax incentives that other companies do not get. We pay less money for oil in this country than most other industrialized nations. Oil companies do not need more tax breaks. The oil depletion allowance lets certain companies deduct 15% of the gross income they derive from oil and gas wells from their taxable incomes, and continue to do that for as long as those wells are still producing. An examination of the American tax code indicates that oil production is among the most heavily subsidized businesses, with tax breaks available at virtually every stage of the exploration and extraction process. According to the most recent study by the congressional budget released in 2005, capital investments like oil field leases and drilling equipment are taxed at an effective rate of 9 percent, significantly lower than the overall rate of 25 percent for businesses in general and lower than virtually any other industry. An economist for the Treasury Department said in 2009 that a study had found that oil prices and potential profits were so high that eliminating the subsidies would decrease American output by less than half of one percent.

There is no need to give tax breaks to a highly profitable business that would do what they do anyway. We are one of 3 states that do not provide any money for public transportation. We need to focus on supporting public transportation for our future not on giving a company that already receives tax incentives money.

The link to send them emails are below Assembly members

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