You may have heard that Sarah Palin raised taxes on oil companies in Alaska when she was governor, but what most people don’t know is how economically smart her tax plan was. In a nutshell, here’s how it’s structured: when the oil prices are high, the tax is higher; when oil prices drop, the tax drops. It provides an incentive for the oil companies to keep oil production high, which keeps oil prices and, therefore, gas prices low. It’s very smart. More from Cary Wesberry:
Former state Representatives Pete Kott and Vic Kohring have been convicted taking bribes from oil company executives in Alaska. Using the oil profits tax passed in 2006, these politicians literally used their offices to steal money from the citizens of Alaska. Governor Sarah Palin would have none of it, and set to work to correct the problem and return that money to Alaskan residents…
Governor Palin did what any conservative worth their own soul would have done. She gave tax dollars that were literally stolen from Alaskan taxpayers right back to them and appropriately reversed corrupt tax policy. Not only did she bring ethics back to the tax policy in regards to the oil industry in Alaska, she improved the policy itself in her proposal.
The tax raises when oil prices are high, and falls when oil prices are low. This give amazing incentive for the oil companies to produce more oil, which increases supply, and lowers prices for everyone including the taxes they themselves pay the state. When oil prices are low the tax moves to a 10 percent tax on the gross, instead of the net tax of 25% when prices are high. Instead of, not in addition to. The oil companies in Alaska with the Palin proposal pay the state minus their operating expenses along with pipeline and tanker charges. In this way, the oil companies are not taxed for the cost of doing business.
James Pethokoukis at US News and World Report notes her tax cutting policies from when she was mayor of Wasilla:
Jimmy P. at the RNC –“Oh yeah, she gets it,” is how one economic conservative described to me last night the economic philosophy of Sarah Palin. By “get it,” this person meant that Palin sees the value of low taxes and reduced spending. This, for instance, from her 2006 campaign:
As Mayor and CEO of the booming city of Wasilla, my team invited investment and encouraged business growth by eliminating small business inventory taxes, eliminated personal property taxes, reduced real property tax mill levies every year I was in office, reduced fees, and built the infrastructure our businesses needed to grow and prosper
Among her tax other reductions, courtesy of the Cato Institute, were a $20 million tax credit for film production in the state, a $2 million repeal in tires taxes, a $40 million suspension of the state fuel tax, and a 50 percent cut in the annual business license fee.
So what taxes has Obama cut? What budgets has he balanced?