9/09/2008

Brendan Miniter on Palin Taxing Oil Companies

Are there any attacks on Palin that are correct? The banning books, the Bridge to Nowhere, etc. are all false. Brendan Miniter had this discussion in the WSJ's Political Diary:

Palin's Apostasy on Taxes

Talk about strange bedfellows. Ultraliberal Mother Jones magazine is attacking Alaska Gov. Sarah Palin as a "tax raiser" and similar hand wringing is coming from some Republican supply-siders. Why? An oil industry tax bill she pushed last year.

Not only did the bill raise an existing tax on oil production. It also increased a windfall profits provision. Previously, oil companies paid a tax on a sliding scale that kicked in at $55 a barrel. The new tax Gov. Palin signed into law kicks in at $30 a barrel and increases at a faster rate than the old tax. It's a record that suggests Mrs. Palin didn't have one eye on this year's GOP veep nomination, but was trying to be an effective governor -- because her efforts cleared a stench of corruption around oil-tax policy and opened the way for a long-stalled pipeline project to deliver natural gas to the lower 48.

Let's look at what actually happened. In 2006, in the waning months of his administration, Republican Gov. Frank Murkowski called a series of special legislative sessions to ram through his embattled plan for a new pipeline to deliver Alaska's untapped natural gas reserves to the upper Midwest. He failed, but succeeded in changing the oil tax, which previously had been tied to gross revenues. As a concession to his opponents, a sliding scale was also imposed that would increase with an increase in the price of oil -- essentially a windfall profits tax.

Within weeks of the bill passing, federal investigations revealed evidence of extensive bribes paid to lawmakers from oil lobbyists. Meanwhile, the bill proved very unpopular with the public, and failed in its aim of smoothing agreement on the pipeline. Enter Ms. Palin, who had defeated Mr. Murkowski in a Republican primary that August and won the general election in November. She called her own special session and enacted a revised tax bill that increased the profits tax to 25% (from 22.5%) and also included the windfall profits tax. But she also succeeded where Mr. Murkowski had failed -- winning agreement on the pipeline. The state is now accepting bids to begin construction.

Ms. Palin clearly wasn't going to reopen the tainted tax law without somehow signaling to the public that the new bill was on the up-and-up. The reality is, Alaska had been trying for decades to get its huge undeveloped gas reserves to market. Now energy production is finally getting ready to take off, a slightly higher tax rate notwithstanding.

-- Brendan Miniter

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1 Comments:

Blogger Shawn said...

Palin and McCain for the CHINO Ticket 08!!

CHINO! CHINO! CHINO!

9/09/2008 5:35 PM  

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