Here is my opinion:
It seems to me that we are over taxing and creating a difficult investment environment for the industries which we rely on for 90% of our revenue stream here in Alaska.

We need more business not more goverment.

Below is some info I dug up in determining my opinion.

ACES (Alaska’s Clear and Equitable Share) is the current tax code implemented by Palin in 2007. The tax code before that was called Economic Limit Factor (ELF).

ACES generates many more tax dollars then ELF:
“Over the course of the full year (2008), ANS crude oil averaged over $92 per barrel, resulting in five times more revenue than would have been realized under the ELF system.” (1).

ACES is a progressive tax based on ANS (Alaska North Slope crude oil) price per barrel.

Here is the tax structure (1).
30$per barrel= 25% tax for the state
80$per barrel =37% tax for the state
120$per barrel = 50% tax for the state
340$per barrel = 75% max. tax for the state

(Note: Some Oil price figures are at the end of this post)

This means that since ACES was implemented the oil production tax average has been around 40%.
Also…this % does not take into account the property tax paid on all oil and gas exploration, production and transportation property located in Alaska which is taxed at a rate of 20 mills, or 2 percent (2) of the assessed value.

The total assessed value of Oil and Gas production property in Alaska in 2008 was just over $17.9 billion. (2)

(3)
Oil Prices
December 7, 2007 $88.28
June 6, 2008 $138.54
July 4, 2008 $145.29
September 26, 2008 $106.89
December 5, 2008 $40.81
June 5, 2009 $68.44
October 23, 2009 $80.50
December 24, 2009 $78.05
June 25, 2010 $78.86
October 29, 2010 $81.43
November 5, 2010 $86.85
December 31, 2010 $91.38
January 7, 2011 $88.03
July 29, 2011 $95.70
October 28, 2011 $93.32
December 23, 2011 $99.68
April 27, 2012 $104.93
June 29, 2012 $84.96
July 27, 2012 $90.13
August 3, 2012 $91.40
August 10, 2012 $92.87

(1) Alaska’s Clear and Equitable Share (ACES) Status Report Alaska Department of Revenue January 14, 2010 http://www.revenue.state.ak.us/1-14-10%20ACES%20Status%20Report%20final2%20(3).pdf

(2 http://www.tax.alaska.gov/programs/programs/index.aspx?

(3) http://www.nyse.tv/crude-oil-price-history.htm

I appreciate all the observations you gave about ACES
However, in the last session our State Senate discussed "marginal tax" and then "statutory tax" (what the the price we sell our product for, under ACES). Then they looked at "effective" tax. That is what do the oil companies really pay in fact after you deduct the tax credits they are given, and the deductions they can make because it is a price set on net, not gross profits.
If you look at the findings of the Senate you will see that in fact, the "effective tax" (what they actually paid) was much less that even the statutory tax.
They also acknowledged that extracting heavy oil, or "frakking" would be more expensive and so tried to come up with a fair price for those products. They proposed adjustments to the price we ask for the product we are selling - i.e. oil.
Apparently that was not enough for others and their proposal was not accepted.
If you would like to see an extreme case of the difference between "statutory tax" (what the law or regulations say the tax should be) and the"effective tax" paid by General Electric in the past year, the effective rate on their billions of dollars of profit was zero ! They used all the loop wholes in the law to avoid any tax.

MOLSON:

Thank you for the additional information.

(My Opinion) Use of the effective rate is a slight of hand for proponents of increased taxes and big goverment. (end)

If you use the effective tax model for oil taxes (for 2008) then you are correct and the taxes were about 10% lower than the nominal rate, however the 2013 “effective rate” might be 70% or the 2014 rate might be 75%, but you are correct that the effective rate is almost always lower than the nominal rate. But, if we are to judge things by the effective rate then we should remove all write-offs from the tax system.

The “nominal tax rate” is the STATUTORY tax rate as applied to the net value of oil and gas production. http://www.revenue.state.ak.us/1-14-10%20ACES%20Status%20Report%20final2%20(3).pdf

Also…tax credits did increase with ACES but that was only on certain types of capital expenditures and were overshadowed (especially during higher oil prices) by raises in the tax rate.

Example: If you raise my taxes rate across the board by 10% and then give me an 8% credit for buying an electric car or solar panels I still lose; and I have to keep buying electric cars.

Tax Credits:

Credits are among the most complex topic in the law. They were designed to promote drilling activities in many of Alaska’s more challenging regions, incentivize the development of heavy oil, increase the use of extended reach horizontal wells and
seismic technologies, and de-risk drilling offshore in Alaska waters by providing companies with tax incentives to develop these proven resources and find new ones.

These tax credits include:
• Investment/Capital Tax Credits are credits deducted directly from the producers’ tax liability. Under ACES, capital expenditure credits remain at 20%. ACES eliminated
transitional investment expenditure (TIE) credits, which allowed producers to recover investment made in the years before PPT passed.
• Loss Carry-forward Credits increased from 20% under PPT to 25% under ACES. These credits allow a company with production profit in a given year to carry-forward the effect of any lease expenditures that it could not use that year.
• Small Producer and New Area Development Tax Credits remained unchanged in ACES. These are non-transferable credits applicable to small producers who make qualified expenditures but whose current tax liability is insufficient to apply the credits to their tax bill. ACES retained a $6 million dollar new area development
credit as well as a $12 million dollar small producer credit.
• Exploration Incentive Credits increased from 20% to 30% under ACES for exploration done 3 miles from existing wells or 25 miles from an existing unit. If both these criteria are met, a 40% tax credit is available for utilizing seismic drilling technologies.

http://www.makealaskacompetitive.com/wp-content/uploads/2011/02/Final-OI...

First, I don't think that "effective" tax, the amount buyers actually pay us for the product we are selling (Oil) is "slight of hand." It is simply what they actually pay for what we are selling.
Secondly, your explanation of tax credits is fairly good, in my opinion, but it does show that oil companies don't always pay the possible price under the statutes, but what they pay after all those credits. Planners have to estimate what those costs and prices may or may not be in the future. That is speculation that cannot be avoided, but is speculation.
Thirdly, the price we set for the product we are selling and the market and competition around the world is a very complex situation. That is precisely why our State Senate called in international experts on the oil industry, our State Department of Revenue, and the oil companies themselves to testify. Fortunately, I was able to watch the legislative session daily on Gavel to Gavel, and in my opinion the Senate was trying to be open and fair. That is why they came up with some compromises and concessions.

There is a certain "contest" here. According to our State Constitution, it is the responsibility of our legislature, courts and administration to seek the best profit or benefit for all Alaskans. Businesses and corporations, like the oil industry, have a fiduciary responsibility to get the best prices they can in purchases to benefit their shareholders and enterprises.
That is why it is not so much "taxes" as sellers and buyers, each trying to get the best they can for themselves and those they represent.
I don't think you nor I personally, all by ourselves, are going to be active participants in these negotiations. That is why we have to be very careful and selective in electing those who will represent us in these discussion. There are, and will be millions of dollars spent in advertising trying to persuade voters to elect representatives.
Like you, as citizens, our obligation is to try and find as many verifiable, correct facts and information as we can, and then elect those we think will best represent us, not those paying for the advertising.