State income tax would be a mistake

To the editor,

The Governor’s budget proposal is a very controversial piece of legislation. His idea to “save the Permanent Fund” actually does away with the Permanent Fund Dividend and replaces it with a “Percent of Royalty” rebate. I hope many Alaskans realize this. I have no problem with it as long as Alaska residents realize that this would, in all likelihood, result in the money they receive from the State eventually tapering off to zero as production and the price of oil decline. Governor Walker’s budget also includes the imposition of an income tax, which would place the burden of financing the state government on a small number of Alaska residents, while allowing residents who do not earn income to place the burdens of such things as bond issues onto the backs of the small number of folks who actually produce income. A narrow tax base is always a bad idea in my opinion, and it is demonstrated well in the Municipality of Anchorage, where the property owners bear the burden, while many who use the roads, schools, and public safety apparatus are only responsible indirectly (through rent increases) and essentially get a “free ride”.

A statewide sales tax would be a much better way to add to the state coffers. Budget cuts should be first, accessing the earnings of the Permanent Fund should be second, and lastly, a statewide sales tax. The sales tax would embrace the largest possible tax base, since everyone would pay it, and, since we get many more visitors to Alaska than we have residents, the tourists would bear some of the responsibilities for the roads, first responders, etc. that they benefit from while they are in our state. If the regressiveness of a sales tax is a burden, a small rebate of the sales tax could be sent to each Alaskan household (not resident) similar to that employed in the “Fair Tax” proposals.

An Income Tax (and increased corporate tax) is a bad idea since it impacts only the productive members of society and not everyone who enjoys living in this wonderful state.

Don Hepler

Wasilla