Pay fair taxes, build Alaska Permanent Fund

The Permanent Fund can not yet earn enough investment income to fund government. Earnings are projected to be $4 billion in four years. Gov. Bill Walker's veto has taken $700 million from dividends this year. In 2016, the Legislature for the first time has not provided, as required by law, for inflation-proofing: "Inflation, that thief in the night," said Elmer Rasmuson. The fund is poorer as a consequence. Some $19.2 billion of the fund corpus has come from inflation-proofing.

If we build the fund using a share of all income streams, new and future, we will get there. That is, get to the point that the fund can provide enough revenue for full dividends calculated in the historic manner, and a lot of good government expenses: schools, health and welfare, public safety, fish, wildlife, forest management, energy and transportation infrastructure. All of these and nothing more. Grandiose development schemes should not be included. Such pipe dreams as giant gas lines and dams and domes over Denali should satisfy two criteria: public approval and private, not government, financing.

Money into the fund means dividends increase: individual dividends, community dividends, education dividends.
We can charge real royalties for all that we own in common and that we license private entities to harvest. Non-replenishable extraction should finally pay a fair share: about 20 percent on mining, 50 percent on oil and gas (at least until industry makes up for the undue reductions of the last 30 years). Replenishable resources from fisheries to forests should pay a larger share as well; 12 percent seems fair to me.

[Slow down, Alaska. You've got time and resources to get a fiscal solution right.]

The income from each of these sources should go half to the Permanent Fund and half to our good government services.

Finally, there is the possibility of a state income tax that would be calculated as a percentage of what is paid federally. That way it can be a write-off on what goes to the IRS. Although most have agreed that royalties rightfully contribute to the fund, taxes are another matter. Some do not think an income tax (or other taxes) should contribute to the Permanent Fund. They could be right, but I think we should consider putting 50 percent of a state income tax into the fund. The faster the fund grows, the sooner it brings back more earnings to pay for inflation-proofing, government  programs and dividends to help float all boats.

Larry Smith describes himself as an "old bull" carpenter based on Kachemak Bay. He published the late Jay Hammond's book, "Diapering the Devil." 

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