The politics of oil taxation in Alaska

Democrats, the party of government, are ready to tax Alaskan oil not just to avoid reducing government, but to increase it. Republicans, the party of private enterprise and smaller government, have not favored increasing revenues from the oil industry. We don’t like imposing taxes on those producing wealth, and we don’t want to grow the government.

But times have changed, and Republicans need to change as well. Now, oil tax revenue is needed in order to fund the permanent fund dividend. If more revenue isn’t obtained, there won’t be a dividend.

But Republicans need to exact a price for their support. They must demand that the dividend be funded. And they must demand that state spending be reduced. Otherwise, no deal.

In order for this deal to be enforceable, and permanent, it needs to go into the Alaska Constitution, in the form of a guaranteed dividend. That, in turn, may require a constitutional convention, which can be called by a vote of the people in 2022. Until then, it’s up to the Republicans to enforce it.

Aside from the districts of Senators Stedman, Stevens and Bishop, Republican legislators represent people who just voted resoundingly against Prop 1, an oil tax increase. In order to justify their support for such a tax, they must not only explain that it was necessary to fund the dividend. They also have to show that it was not used to grow government.

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