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An Introduction to Sarah Palin-omics

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?


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Comments (26)

There are reports on variou... (Below threshold)
Rance:

There are reports on various web sites that Palin took Wasilla from a balanced budget to $20 million in the red.

True, false, or somewhere in between?

A bunch of stuff is ... (Below threshold)
Larry:


A bunch of stuff is left out of the analysis of Palin's plan. One very key factor is that the State of Alaska OWNS the oil, not private land owners. This makes their situation different from that in most other places in the US. This means that the revenues to Alaska are the same as royalties paid here in, for example, Texas as oil is produced on private property. 10% of the gross is far less than the more common 16% royalty, but the profit tax might make up for that. I need more information, so I will go find it.

Wait a minute...Co... (Below threshold)
Brian:

Wait a minute...

Conservative building into the law to raise taxes on oil companies when prices go higher = very smart.

Liberal proposing to raise taxes on oil companies when prices are higher = communist.

Got it.

Brian,That's not q... (Below threshold)
Sky Captain:

Brian,

That's not quite correct.

Mr. Obama and Ms. Pelosi want to tax oil companies on their profits above and beyond taxes that the oil companies ALREADY pay.
They call it a "windfall profits tax". Nowhere does a liberal state that this tax is tied to the cost of oil/gasoline, ONLY to the profits of the oil companies.

Liberal proposing ... (Below threshold)
Mac Lorry:
Liberal proposing to raise taxes on oil companies when prices are higher = communist.

Liberal proposing to raise taxes on oil companies when profits are just 9% of gross = stupid.

Nowhere does a liberal s... (Below threshold)
Brian:

Nowhere does a liberal state that this tax is tied to the cost of oil/gasoline, ONLY to the profits of the oil companies.

This is implicitly tied to the price of oil. Do you think that if oil were back to $30/barrel anyone would be proposing this?

There are reports ... (Below threshold)
Mac Lorry:
There are reports on various web sites that Palin took Wasilla from a balanced budget to $20 million in the red.

True, false, or somewhere in between?

Got Links?

Here's the City of Wasilla Budgets and Financial Reports, but only for FY 04 to 08. Palin served as Mayor of Wasilla from 1996 to 2002, so to know anything about her effectiveness you would need records from before 1996, and then from 2002 and 2003. Without that all you get is leftwing nonsense like this. Check the comments.

Liberal proposing to rai... (Below threshold)
Brian:

Liberal proposing to raise taxes on oil companies when profits are just 9% of gross = stupid.

Oh, does Palin's tax hike apply only to oil companies with higher margins?

Nice strawman argument Bria... (Below threshold)
Kenny:

Nice strawman argument Brian,

when have the liberals ever proposed to help out the oil companies in the off years?

And besides, she proposed PROGRESSIVE tax rates. Aren't you in favor of that?


There are reports on var... (Below threshold)
Brian:

There are reports on various web sites that Palin took Wasilla from a balanced budget to $20 million in the red.

Given the number of people who must be poring over Wasilla's records, I'm sure if there was any truth to it there would be actual evidence of it.

Nice strawman argument B... (Below threshold)
Brian:

Nice strawman argument Brian,

Followed by...

when have the liberals ever proposed to help out the oil companies in the off years?

The irony has no bounds.

Do you think that ... (Below threshold)
Mac Lorry:
Do you think that if oil were back to $30/barrel anyone would be proposing this?

Of course not. Why should Congress care if we import 70% of our oil from unfriendly and hostile foreign nations as long as it's cheap? No need to plan ahead, just blame the oil companies for making an extensive 9% profit.

Maybe Congress should apply a windfall profits tax on all business with a 9% or higher profit margin, you know, like law firms, hospitals, and environmental consultants.

Whoa, wait a minute.... (Below threshold)
Larry:


Whoa, wait a minute. *grin*

The money paid to the State of Alaska by oil companies may be called a tax, but it ISN'T a tax, it is a ROYALTY, the equivalent of what an oil company pays a private land owner here in, for example, Texas.

The theory behind the ROYALTY payments is that when oil prices are HIGH, the OWNERS of the land, Alaska citizens, get more money to help them pay for the higher fuel costs. And there is a built in incentive for the Oil Companies to keep prices low and producing more.

Any resemblance to windfall taxes is a strawman.

Brian,first a stra... (Below threshold)
Kenny:

Brian,

first a strawman, then sidestepping. I'll try asking again, although I don't really expect an honest answer from you.

the ignored question was: She proposed PROGRESSIVE tax rates. Aren't you in favor of that?

Oh, does Palin's t... (Below threshold)
Mac Lorry:
Oh, does Palin's tax hike apply only to oil companies with higher margins?

Windfall profits tax is not triggered by margins, but by the amount of money the oil companies make. Who would be proposing such a tax if oil companies were not making record profits? It's like imposing a tax only on successful movies and then complaining when there are no good movies. That's what's stupid about it.

first a strawman, then s... (Below threshold)
Brian:

first a strawman, then sidestepping.

I sidestepped nothing, except your attempt to change the subject from Palin and conservatives to me.

I'll try asking again

I have no doubt of that.

the ignored question was: She proposed PROGRESSIVE tax rates. Aren't you in favor of that?

Yep. Are you planning to start a post about my beliefs? Or can we now get back to Palin and conservative ideals?

Brian,Yet another si... (Below threshold)
Kenny:

Brian,
Yet another sidestep.

the ignored question was: She proposed PROGRESSIVE tax rates. Aren't you in favor of that?

Of course not. Why shoul... (Below threshold)
Brian:

Of course not. Why should Congress care if we import 70% of our oil from unfriendly and hostile foreign nations as long as it's cheap?

The question was if the tax was triggered by the increase in cost of oil. It was.

Windfall profits tax is not triggered by margins, but by the amount of money the oil companies make.

The assertion was that it's "stupid" to raise taxes on companies with 9% margin. Palin's plan does it just the same, so apparently it's OK.

Your other points merely attempt to change the focus from Palin to Democrats.

Yet another sidestep.</i... (Below threshold)
Brian:

Yet another sidestep.

No, you just apparently can't read.

the ignored question

Was answered.

Now you're just being annoying.

Brian,My apologies... (Below threshold)
Kenny:

Brian,

My apologies. I can read, I just missed your one word answer among the other diversions in your post.

Thank you

Your other points ... (Below threshold)
Mac Lorry:
Your other points merely attempt to change the focus from Palin to Democrats.

Wrong, my other points show the hypocrisy of the Democrats wanting to impose more taxes, above the corporate income tax they already collect, on oil companies while ignoring other companies making even higher margins. Their motivation is to appeal to the popular idea that big oil is to blame for high oil prices, an idea they cultivate to avoid being blamed for kowtowing to environmental extremists for the last 30 years.

The average gas price is about $3.68 with the 9% profit. It would be no less than $3,34 without any profit. You think that's cheap gas?

While a bit off topic, here's an eye opening Newsweek article about Mexico's Pemex.

"Liberal proposing to raise... (Below threshold)
retired military:

"Liberal proposing to raise taxes on oil companies when prices are higher = communist."

Releasing someone's SSN (minus last 4 digits) )(Hey that narrows it down to 10000 numbers but hackers can take that and other information and do identity theft.) + home address, + phone number + vin on autos + home addresses + net worth of property owned + quite a few other things = COMMUNIST, intimidation, harrasment plus a few other things.

Why not go join your scum sucking brethren there Brian.


Wrong, my other points s... (Below threshold)
Brian:

Wrong, my other points show the hypocrisy of the Democrats wanting to impose more taxes, above the corporate income tax they already collect, on oil companies while ignoring other companies making even higher margins.

Right, you want to change the subject to Democrats and the windfall tax. As I correctly stated.

The lefty's, proven by Bria... (Below threshold)
WildWillie:

The lefty's, proven by Brian, are beside themselves with emotion because McCain outplayed their guy big time. They cannot grasp it so they have to pick on a child. ww

Brian is being a stickler f... (Below threshold)

Brian is being a stickler for staying on topic and not bringing up what the "other guy" does. I find that rather funny.

Right, you want to... (Below threshold)
Mac Lorry:
Right, you want to change the subject to Democrats and the windfall tax. As I correctly stated.

Lets see, who introduced the windfall profits tax as if the right was being hypocritical? There it is, post #3 by Brian.

No, I'm not changing the subject. My rebuttal to you is right on target. Guess you forgot with all your other posts spread all over the site.




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