Paul Jenkins: Democrats defy reason in support of oil tax cut repeal

commentBy PAUL JENKINSFebruary 22, 2014 

Here is a headline that pries the manhole cover off that dark, scary hole where the left goes to scrape up whatever passes nowadays for its thinking: "State Democratic leaders call for oil tax cut repeal, more for public schools."

"Wow!" I thought. Here is a bit of oxymoronic whimsy to brighten the day. These guys must have found a way to wring blood out of a turnip -- repeal oil tax reform and get more money for schools. Alas, they were fibbing -- again.

When it comes to money and oil in Alaska, everybody who can read knows we are facing a math problem, not a political problem; that repealing oil tax reform guarantees less money for education and schools -- and everything else. A repeal means a return to the bad old days: less oil, less revenue, less of everything.

The headline, it turns out, was real. It was followed by a piece from a pair of Democrats who should -- and do -- know better. It also contained this: "We cannot ignore the enormous deficit in the state's budget. Brought on by last year's oil tax rewrite, the state is now facing up to $2 billion in annual shortfalls."

Not only do they fib, they think Alaskans are too stupid to catch on.

Apparently unsatisfied with stretching the truth to link our children's education with transparent tax flubberdubbery, the writers resorted to cynical Washington, D.C.-style demagoguery right out of Barack Obama's playbook: tax reform has hurt the state.

The practice of telling a whopper often enough that it becomes accepted truth is nothing new. But for a lie to work, it must contain a glimmer of truth. The left cannot conjure up a decent lie supporting a repeal that contains even a smidgen of truth. It might as well be telling anybody who will listen that Obama is a great president.

Why resort to such tomfoolery? Why would the left use such obvious, easily shredded falsehoods? Its threadbare fabrications about a "giveaway" were bad enough. But now it claims tax reform caused the deficit? Why would the left risk the public discovering the truth -- as it most certainly will-- and getting laughed off the political stage on election day?

The truth is simple: For years, we have spent too much, saved too little and counted too often on the next boom to save our bacon. Tax reform did not cause the deficit. Falling oil prices, increased transportation and production costs and sliding production most certainly did. The old Alaska's Clear and Equitable Share oil tax would only have made things worse in the long run.

ACES was a stinker. It indisputably choked investment for new oil production -- you can look it up -- and it cost Alaska $1 billion annually in tax credits that produced no new oil. The production slide went virtually unnoticed because soaring oil prices and all the loot ACES raked off for state government masked the problem. Tumbling prices cleared the fog.

Worse, provisions allowing ACES to contribute to a marginal tax rate of more than 90 percent at higher oil prices hurt Alaska at lower prices -- and booming prices likely are history.

Lower prices and less production meant hundreds of millions less in revenue for state government -- with no good news in sight. The Legislature last year reformed ACES to spur production, and it seems to be working to get the North Slope working.

The reality is we are going to have to get by with less for awhile. Repeal would mean getting by with even less -- forever. We need more oil. We need North Slope oil companies to produce more oil. To fuel state government. To pay for education. To fend off an income tax. To protect the Permanent Fund. To ensure jobs. For a million reasons.

Why Democrats are determined to head off all that is a mystery Are they living out their "what's bad for Alaska is good for Democrats" meme? Are they trying to drum up voters for Mark Begich? What drives them?

I am reminded of Occam's razor, attributed to a 14th century Franciscan friar. There are many versions. My favorites? You cannot discount the obvious and if two competing principles make the same prediction, the simpler one is best.

It just might be these guys are, indeed, crazy.

Paul Jenkins is an editor of the AnchorageDailyPlanet.com, a division of Porcaro Communications, which is performing services for the "Vote No on 1" anti-repeal effort.

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