Canada embraces new investment by lowering taxes while Alaska legislators argue about raising them

By Dan Fagan
Publisher
The Alaska Standard

While literally thousands are losing their jobs in Alaska’s oil patch thanks to high state taxes, legislators like Republican Bert Stedman are worried the state isn’t getting its fair share.

Stedman wants to separate the oil and gas taxes because he fears the state, which is currently hoarding billions in its coffers, isn’t getting enough cash from the industry.

Shortsighted legislators like Stedman are clueless of the impact taxes have on investment. These legislators seem to view tax policy through one prism; how much cash will it bring into state coffers.

Why so short sighted? Maybe legislators like Stedman are so obsessed with filling state coffers because it gives them more cash to please their special interest groups. Or maybe they are just stupid. Whatever the reason, our current leaders are taxing our future away.

In contrast look at what they are doing in Alberta Canada.

The Alberta government is cutting royalty rates for the oil and natural gas industry starting next year in a bid to win back investment in the province. Imagine that. Competing for investment. Alaska passes ACES, which gives us the highest marginal rate in the world, and in Alberta they are cutting taxes.

The Alberta province leaders will cut the maximum royalty rates for conventional oil from 50 percent to 40 per cent, while the top rate for natural gas will be 36 percent, down from 50 percent.

"They will help us use innovation to unlock our energy resources, create opportunities and jobs in communities large and small across our province and strengthen Alberta's economic recovery," Alberta Premier Ed Stelmach said of the cuts.

Province leaders will also streamline its regulatory regime by avoiding duplication with various departments involved in the approval process.

"If we can move towards code of practice in some areas as opposed to very prescriptive kinds of approvals," Environment Minister Rob Renner said.

Cutting taxes and streamlining the regulatory process to spur job opportunities. Where can we find leaders who understand this basic stuff?