16 October 2006

Gas Tax (again!)

I continue to be unsure of how to vote on the natural gas reserves tax on November 7 and I raise the issue again only because I do think it is a massive public policy decision (and thus worthy of serious consideration), I've finally become aware of some of the advertisements being run in opposition to the measure, and it's earning a couple of lame-ducks way more publicity than they deserve.

Billy Muldoon says he can't see how Alaskans "could lose" from the measure and directs readers to one of the few ADN articles I've seen in favour of the measure:

This is not a new idea. Adam Smith, the founding father of economics, grasped the essence of it in the 18th century, and economist Henry George developed it in the 19th. Capital and labor are what power economic development. Tax them too heavily and they flee. Land and known natural resources are different. They can't migrate to a place where taxes are lower. A rational plan to encourage economic development would raise taxes on the value of such resources, and reduce taxes on labor income and improvements -- the houses, pipelines, stores, refineries and everything else made by the hand of man.
I'm glad to see an economic analysis that supports the measure but then I read the News-Miner's editorial and am told to vote "no":

One obviously visible flaw in that message is the contention that the companies haven’t been doing much to advance the pipeline project. Anyone who has been paying even the smallest bit of attention knows that the companies long ago submitted a formal proposal to Gov. Frank Murkowski, who, with his gas team, had been negotiating with the companies even prior to that.

A not-so-visibile flaw in Measure 2’s message is that some Alaskans might be thinking that the state would be able to spend the $1 billion it would supposedly receive from the oil companies collectively each year until the pipeline is built.

So here's what I've got: economic analyses on both sides of the issue (though predominantly in opposition); a general desire to support the measure to spite the oil companies for secretly spending money to oppose the project; general intuitive agreement with both the general "stick" argument for supporting the project and the general "don't tax income before it's earned" argument for opposing it. I'm still looking for something to tip it one way or the other.

Here's a thought: why are all the gubernatorial candidates opposed to the measure even though a plurality of Alaskans appear to suppor the measure? Wouldn't it make sense to at least moderate their positions?

No comments: