Can't hide tax owie under bandages

The great tax debate in Alaska sounds similar to the age-old question of whether it is less painful to yank off the bandage quickly or peel it off slowly and gently.

I have found that it just doesn’t matter all that much how I pull off the bandage. Neither way is pleasant, especially when there is scab underneath.

It’s the same for taxes in tax-free Alaska: None of the options are pleasant; all will hurt at first; there are a lot of political scars and scabs that will break open no matter what tax is adopted, an income tax or a sales tax.

Regardless, the only way the state budget and public service wounds will ever heal is to stop picking at them. For that to happen, a majority of legislators and the governor need to agree on a real fiscal plan, not just talk of a plan or talk of getting together later to talk about a plan.

Until then, too many elected officials are doing the equivalent of pulling back the bandage ever so slowly. Not even pulling it off, just peeling it back for a peak to see which of their constituents cry out the loudest.

There are more tax proposals floating around the legislative pharmacy this year than in a long time. That’s good. It’s the medicine Alaska needs to improve its communities and provide for a healthy future.

It shows that a growing number of lawmakers are doing the math and realizing the state is short of enough dependable revenue to fund quality schools, state troopers, social services, new roads, maintenance of what we already own and the necessary transition to renewable energy projects.

Without a real fiscal plan, which includes taxes, Alaska will continue with self-inflicted cuts and shortages in public services. Even worse, paying for services by drawing down limited savings until they are gone is not a plan, it’s terminal.

But there is hope. More — but certainly not all — Alaskans are increasingly calling for a reasonable tax structure to ensure that the state can provide services in its communities and for its residents, particularly public school students.

After 44 years of tax-free life, more Alaskans are acknowledging that oil cannot pay for everything, though oil revenues certainly will be part of a long-term fiscal plan.

Some of this year’s legislative fiscal prescriptions that gently tug at the tax bandage include an income tax that would apply only to people making more than $200,000 a year. There is a proposal for a personal income tax that would be capped at the amount of each year’s Permanent Fund dividend, so that no Alaskan ever pays more in taxes they receive in the annual PFD. There is a proposal for a flat $30 tax on anyone earning money in Alaska, with the revenue intended — but not guaranteed — for school construction and repairs.

There also is an ill-conceived proposal for a state sales tax that would not exempt food, medicines or even funerals, as if the sponsor is intent on proving that only death and taxes are absolute.

The options are out there, even though some are not the best medicine to really heal the state’s fiscal wounds. Alaskans just need to make a choice, find the most efficient and least damaging way to pull off the bandage, and pay something toward the state services they have long appreciated.

 

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