In his May 21 My Turn, Todd Smoldon is thankful that there are no new taxes but disparaging of the use of the permanent fund earnings to support “government largess.”
Government largess?
Does he mean schools, troopers, or road maintenance? Fish and game management, correction officers or child welfare programs? The university system, public health programs, or state district attorneys? The list goes on.
The state budget has been dramatically reduced over the last few years, to the point that some essential services are now underfunded. Smoldon does not offer a sustainable fiscal alternative to maintain state services. I agree with him that the use of some of the permanent fund earnings for state government rather than dividends is a de facto regressive tax, costing lower income people proportionately more relative to income.
On the other hand, it is a good thing that all Alaskans help pay for the government services they use and depend on; we pay more attention when we all have skin in the game. The appropriate way to balance the regressive impact of the use of permanent fund earnings is to have a progressive income tax as another part of a sustainable revenue system, where those that can afford it most pay more to help maintain our state services. Progressive income taxes are not some radical new idea; the federal government and some 43 other states use them. Judging by the booming economies in many of these states, they do not seem to be an anchor on economic growth.
Alex Wertheimer,
Juneau