House panel approves $100 tax on Alaska workers

Posted: Sunday, March 28, 2004

Alaska workers would be taxed $100 annually, under a proposal approved by the House Finance Committee.

The tax - estimated to generate about $43 million a year - is the first major revenue proposal to clear a finance committee in either the House or the Senate this year.

The tax, proposed by Wrangell Republican Rep. Peggy Wilson, could be part of a larger solution to the state's chronic budget shortfall, said Anchorage Republican Rep. Mike Hawker, a Finance Committee member.

It would allow all workers in Alaska to "ante up" and help to support the services that the state offers, he said.

Alaska used to have a $10 head tax on workers, and some lawmakers said there is public support for bringing it back in some form. But others said they aren't sure if it would be worth the $680,000 cost of setting it up and the more than $1 million it would take to administer it each year.

"There seems to be a lot of extra work and extra bureaucracy for a pretty small amount," said Anchorage Republican Rep. Kevin Meyer.

Anchorage Democratic Rep. Eric Croft gave the tax a "Do not pass" recommendation Thursday. He said it's not fair, because the working poor would pay the same amount as someone who makes $500,000 a year.

Democrats also argue that a 5 percent statewide sales tax being considered in the state Senate would hit the poor harder than the rich. Bethel Democratic Sen. Lyman Hoffman said it isn't fair to rural Alaska, since the higher cost of goods in the Bush means more sales tax would have to be paid on a gallon of milk there, for example.

But the sponsor of the sales tax, Anchorage Republican Sen. Ben Stevens, disagreed. It's fair because everyone across the state would pay, he said.

Stevens, the majority leader of the state Senate, said he's serious about attempting to get a sales tax through the Legislature.

"We'll keep trying," he said. "As it stands now, obviously we don't have the votes for it."

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