Should oil tax policy be about more money for government spending or more economic opportunity for Alaskans?
Legislators in Juneau who support higher taxes are the same ones arguing for more government spending. However, most Alaskans know that you cannot tax your way to prosperity, nor can you spend your way there.
Historically, low taxes have fostered economic expansion. President Kennedy's commitment to lower tax rates triggered economic growth throughout America. President Reagan, he did the same in the 1980s when he lowered taxes. He tamed the tiger of inflation and established the foundation for America's economic recovery.
The United Kingdom recently lowered taxes and its government take on oil from the North Sea. The result: increased investment flowing in the form of new jobs and production. In fact, from 2012-2013, investment in the United Kingdom has grown by billions of dollars due to a more competitive tax structure.
Closer to home, we have seen the effect a competitive tax system has had in the Cook Inlet, where low taxes and incentives have attracted new companies and new investment. The flurry of activity is already delivering needed energy to Alaskans, a boost to the local economy and it will pay dividends well into the future.
Unfortunately, some legislators just want to protect the government and grow its size. Rather than concentrating on economic opportunity, they talk about how much government will have to "give up" if oil tax reform passes. They speak about how much it will "cost" government coffers in foregone tax revenue. Nowhere do they advocate for private sector economic growth for Alaskans.
They just want to tax more to spend more.
To borrow an old metaphor, tax policy should not be about seeing how many feathers government can pluck from the goose without too much squawking. Instead, tax policy must be about growing the economic pie for all Alaskans.
State government does not need more money now, nor does it need higher government spending. What we need is more economic opportunity for Alaskans. So how do we get it? Well, through new oil production.
And, how do we get more oil production? Much like when an Alaskan looks for a bank or credit union that will provide the most interest on deposits, Alaska must be a better state to invest in than the next place companies can take their money. Why shouldn't Alaskans be profiting from new company investment dollars and new production?
Alaskans should have the jobs from new oil, not just North Dakota. Alaskans should have more small business start-ups and production growth, not just Texas.
The next time you hear a legislator talk about how much oil tax reform will "cost" the State, ask them why they would rather protect State government at the expense of every Alaskan's opportunity.