This is a very difficult concept to explain: Raise taxes on super rich. Yes, massive tax increase on the oil companies. Gov Palin proposed raising tax from 22.5 to 25% with Alaska’s Clear and Equitable Share, or ACES. It would also charge 0.2 percent for each dollar the price of oil rises above $52 per barrel. Her state colleagues loved the bet and raised her call by changing the 0.2 to 0.4. There is a deduction allowed for production cost of ~$30/barrel.

And give out another $1200 rebate to help the voters, er the people. That takes a lot of guts, taxing my oil companies.

http://gov.state.ak.us/archive-38233.html

“Alaska collected an estimated $6 billion from the new tax during the fiscal year that ended June 30, according to the Alaska Oil and Gas Association. That helped push the state’s total oil revenue — from new and existing taxes, as well as royalties — to more than $10 billion, double the amount received last year.” BP Alaska, which runs Prudhoe Bay, said earlier this year that it had delayed the development in the western region of the North Slope as a result of the tax. ConocoPhillips cited the same reason for scrapping a $300 million refinery project.”

When President Palin takes charge in ~3 years, I hope she can do the same for the federal budget by raising taxes on fat cats and Piggs like me and FLU (I hope you don’t mind).

For the record I (Equalizer) do not support this idea cause oil companies will switch to other projects, the idea is not scalable to other states because of special situation, I don’t want my oil dividend cut to give others tax cuts, the slippery slope argument, etc. And do tax cuts (indvl or corporate) stimulate the economy? http://www.investopedia.com/articles/07/tax_cuts.asp

“What the tax has done is take away all the upside,” said Doug Suttles, president of BP Alaska. The U.K.-based oil company paid more than $500 million in taxes to Alaska last quarter — far more than it earned in profits from Alaskan oil, according to Suttles.

Investment dollars are flowing instead to places that have a better return, like the massive deep-water projects offshore in the U.S. Gulf of Mexico, where ConocoPhillips said the government take equals less than 50 percent of the barrel.

In July, BP announced it would begin developing the Liberty oil field, a $1.5 billion project expected to yield 100 million barrels of oil, located on federal lands in Alaska. If the project had been located in state lands on the North Slope, “I don’t think we’d have been able to make that investment,” Suttles said.”

http://seattletimes.nwsource.com/html/localnews/2008103325_alaskatax07.html