Income tax beats loss of Permafund checks

Posted: Friday, April 12, 2002

This letter is in response to Loren Gerhard's My Turn, "The PFD party's over, let's move on," of March 25. Like many, I was not a resident of Alaska during the debate and initial inception of the PFD. But quoting page five of Gov. Jay Hammond's most recent book "Chips From the Chopping Block," he states the fund's purpose was to "counter selective greed with collective greed." Collective greed means that all residents would share in its excess wealth and not just a selective few (special interests).

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The PFD party's over, let's move on

Mr. Gerhard states Alaskans are not entitled to this money because we didn't earn it. Neither did government earn it; the oil companies earned it. We all know the government is a model of efficiency. We are led to believe the select few for government can better spend that oil wealth. Mr. Gerhard, do you believe state representatives from Anchorage and the Mat-Su boroughs, the ones that want the Legislature moved north, can do a better job of spending our earnings from the Permanent Fund?

Mr. Gerhard stated we are on the government dole. Let's face it, one could say all local, state and federal employees are on it. We all are to some point on the dole, doing or getting something for less than its actual cost.

You have to understand that, morally, I vote Republican, but to hear the debate by the Republican majority sickens me. Why, you ask? Eighty-three percent of the voters basically said, "Don't touch the PFD." There are other avenues of revenue to choose before using the PFD earnings.

I truly hate taxes, but an income tax provides one of the best options for equally providing revenue to the state. Nonresidents would finally pay tax. Residents would pay, for example, a 10 percent state income tax based on his or her federal tax return. I paid $5,000 in federal tax for the year 2001; I would pay an additional $500 to the state of Alaska. You could cap the state income tax at the amount of that current year's dividend. This would satisfy the high-income earners. But did the majority do this? No. I can't predict the future, but I see the Republican majority being the minority and the governor being a Democrat.

To touch on the principle of the Permanent Fund, I would consider voting "yes" in the future for $1 billion or $2 billion of the Permanent Fund principle going to the budget reserve, but only after an income tax is in place. When you examine other states and nations who had similar oil wealth, today they have very little to show for it. It was the selective few who benefited from these other nations.

I've lived in Rhode Island, New York, Indiana and now Alaska for the last 20 years. I received my first dividend in 1985, and proudly say this is the only state willing to share its wealth with all residents. Every October I thank the wise legislators, then and now, and Gov. Hammond for crafting this magnificent wealth fund.

David Hurlbut


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