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Issue Position: Oil Taxes

Issue Position

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Should the Legislature modify oil taxes to be more competitive?: Alaska has one of the highest combined tax rates on oil production on the planet. While the State gives generous credits for exploration, it needs to go further and reduce production taxes in order to spur production competition. But we can be smarter than simply reduce taxes. We need to have an end goal: creating jobs for Alaskans, providing regional economic stability and making sure the leases are worked on an immediate, sustained basis. Therefore, elements of the Norwegian model are attractive: e.g., resource mapping by the State, time-limits on leases, and consequences for not developing the lease. Also, AS 38.06.070 allows the DNR Commissioner to require price or supply benefits to state citizens, this should be in future contracts. I was an early advocate for reduced taxes, along with the North Pole City Council. Lower taxes mean greater opportunity and more work for local employers and employees. Conversely, higher taxes not only slow production, they reduce sales. Low taxes in N. Dakota have helped the Bakken oil supplant Alaskan oil in West Coast refineries such as Anacortes, WA. We need to think and act smarter.


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