The Legislature has done its best to avoid a poison-pill tax bill for years. Now our governor is proposing to use a portion of the Permanent Fund to balance the state budget. Since more money is needed to run the essentials of government and keep a balanced budget, and the constituency does not favor tapping into the PFD, why not create a tax system the people would be willing to participate in?
It could work something like this: For every penny the Legislature deems it needs to collect in taxes to provide a fiscally sound government, another penny is collected and deposited in an interest bearing/investment account for future generations. Similar to the PFD, yet separate. The sole purpose of this fund is to eventually eliminate taxes, or even the question of taxes, once and for all. Call it the 2020 Vision Fund. Hypothetically by the year 2020 or thereabouts, this fund's accrued capital gains are tapped to run all state and municipal government programs. By law this would coincide with a systematic reduction in taxes and fees until they are abolished altogether. Once the idea is studied and modeled by experts, the appropriate time to draw on the fund may be the year 2025 or 2030. It makes no difference. The ultimate goal is the same. Terminate all taxes and fees such as: A) all municipal and borough personal property taxes starting with primary residence, B) automobile licensing fees for noncommercial use, C) any existing sales tax levied by any municipality and D) all state income taxes.
The tax system that establishes The 2020 Vision Fund must be broad-based. It needs to be on retail sales and services as well as personal income. Why? A) No demographic group or industry is unfairly targeted and B) those who benefit by working in Alaska while residing elsewhere pay their fair share.
Imagine how wonderful it would feel to know that every time you bought groceries, paid for a new car, went to the movies or looked at your payroll deductions you knew that half of what you paid in taxes was going into a giant fund that benefits everyone for generations to come! What a legacy to leave our children! This is a tax the people would vote for. This is a tax any legislator could support without committing political suicide.
Leave the Permanent Fund as it is. It is and will continue to be the people's choice for what ever they need it for while providing a tremendous boost to the economy.
Todd E. Lance