Taxing Alaskans: An Open Letter To Commissioner Hoffbeck

Dear Commissioner,

I sent the material below to a number of Anchorage legislators earlier this week, and Andy Josephson asked me if I would share it with you. My point in sending this to the legislators was that while it seems that one and all in Juneau talk about wanting to hear from the public, the public statements of those asking for input seem to reflect little of what passes for what is discussed on the street. In the meantime, we are bombarded by schemes that most see as dubious at best, and all lacking much in the way of documentation, modeling, etc. If you want to make an impression on concrete learners, you have to come up with some manipulables…

Folk on the street elected our Governor because they had had enough of Parnell. I think they would have elected a gorilla if they had to, meaning no disrespect to Governor Walker. And now, the Governor has another chance to repudiate the policies that Parnell championed, and the people of this State are ready to rally around the Governor, as they rallied round him with respect to Medicaid Expansion.

The fact is that most Alaskan make no net payment for any State or Local service. Period. Moreover, those who do pay a little something are 1%ers, and frankly can afford paying their way. Alaskans can afford MORE than a 15% nominal tax and we insist, across the board, on our willingness to raise taxes on ourselves to maintain the quality of life we enjoy as long as the taxes are not wasted. Let’s get to taxing!

Thanks for reading,

Marc Grober


Dear Legislator,

Please review this Google Doc spreadsheet  . It provides a brief examination of the revenue that a 15% nominal graduated income tax might generate on its own. [the spreadsheet has been embedded below to make it easier for the reader]

As State Income Taxes and Local Realty Taxes are deductible from Federal Tax, the total tax burden on “middle class” Alaskans would rise only a few points. As noted this basic analysis uses SOI brackets for ease of gross computation; actual brackets could be significantly skewed placing a greater burden on those itemizing.

Additionally, however, if we use a State Income Tax as a tool by which we can leverage other taxes we can also look at half a billion gallons of fuel used on the highway annually (about half gasoline and half diesel), and if we impose a $6/gallon tax, and then exempt first 100 gallons per household for 261,000 households we get another half a billion in revenue (yes, prices of shipped goods will rise across the board, which makes it more economical to buy local….) AND then we need to add the tax to private non-commercial airplane fuel

Lastly, removing the booze excise tax and replacing it with a retail tax starting at a dime per mL of actual ethanol, as in a 750 ml bottle of liquor at 100 proof might produce .48 (ABV)* 750 (mL) *$1 (tax) * .1 (multiplier) = $36 for a fifth of booze. Likewise a 750 ml bottle of wine would produce .13*750*$1*.1=$9.75 on a bottle of wine, and even after a modest exemption for a gallon a month, we have added another chunk of change and a real complement to a marijuana tax.

Now, repeal SB21 and dump all industry subsidies, and we are pretty close to being self-sufficient

Let’s put an end to the whine of the middle class welfare queens. Let’s put an end to the silly chatter about economic deportation of seniors, and let’s recognize that the median income in Alaska is over $70K (over $80K in urban Alaska), and Alaskans not only can pay their way, they have repeatedly told the focus group held by far right ideologues that they are WILLING to pay the taxes necessary to maintain their quality of life.

Stop talking about playing with the PFD: that is simply a shell game as any economist will tell you. The PFD – except in the Unorganized Borough, which is another matter altogether – is simply an in lieu transfer; PFD’s, while they provide an interim multiplier effect, also underwrite most of Municipal taxation on resident populations.

Stop talk about tapping reserves, as we all know legislators can’t be trusted in the hen house.

Promote a comprehensive tax regime that will meet Alaska’s real budget requirements.


A Last Supper

Listening to the Alaska House Task Force squabble over their report brings back memories of that vintage Super Bowl bit of Americana evidencing that Americans are the most gullible creatures on Earth.  Perhaps the cleverest application of that bit of MadAve genius might be credited to a comment by Cheryl Bezaire, “ The Lord’s Supper: Tastes Great / Less Filling”, but the leveraging of that piece of inanity is legion. millerlite

What was so ironic about the ad (and it is as chilling now as it was almost 30 years ago) is that the public is suckered into accepting that the discussion is about beer worth drinking. Likewise, whatever the take of a particular faction on the Task Force, the fight on the right takes one thing for granted; education funding must be reformed because the money we spend is not being spent well.  Yes, some argue we need to cut back, and some argue we need to spend smarter,  but they all agree on a matter not in evidence, which is that we need to go on a education funding diet.

It is a bit frightening to suggest that Andrew Halcro is holding down the progressive end of an argument, but that is what happens when one gets sucked into the vortex of “Tastes Great / Less Filling” – even the most self-evident of acknowledgments appears sage as compared to hysterical pronouncements of self-fulfilling prophets.  If you want to avoid a budget crisis, throwing away millions for redundant playgrounds and billions to bribe oil companies will tend to sap the zest out of any savings plan…

But what the whiners and the renders fail to recall is that most Alaskans pay a NET ZERO for all their State and Municipal services.  Let’s just repeat that, shall we?  Most Alaskans pay a NET ZERO for all their State and Municipal services. That is because Alaskans pay no income tax and their payment in other State and Local taxes are largely offset by their receipt of a yearly payment from the State.  Yes, all the gnashing of teeth and the doom and gloom is over the nightmare of the residents of Alaska actually having to assume some personal responsibility with respect to State spending.

The upshot then is that the Task Force is hustling the Alaska public like Miller Lite hustled America; excuse us while we obscure from your view the fact that funding education is really not a problem in that all we have to do is PAY FOR IT.  The argument over whether public education is an investment or a cost (or vice versa) takes advantage of the same ploy; it leads one, as a sheep to slaughter, into arguing over accounting fictions and missing the fact that in the largest sense it is neither.

And therein, perhaps, lies the rub,  because the subtext is that the folk driving the Alaska Legislature not only don’t want to pay for anything, they want others to pay them to do what they want.  Yes, they want the State to pay parents so that parents can shield their kids from things like science. Yikes!

Meanwhile, the Administration is knee-deep in it’s own form of “education reform”, arranging for millions to be spent on outside contractors by State Districts to engage in constructivist assessments. Yes, while on the one hand teachers are advised they must engage only in research based pedagogy, the Alaska Administration of Sean Parnell has launched a mandatory attack on Districts requiring the use of expensive proprietary non-research based ideological methods as for evaluating teaching staff, which teaching staff, already overworked, is now somehow expected to find an additional 10-15 hours a week to play make believe over developmental theories that are not research based.

Are our problems so intractable? We have bozos declining revenues on the one hand, while we have other bozos wasting money on the other hand.  It would seem that the easy answer (though I do NOT subscribe to easy answers) wo0uld be to get the bozos off the bus, and as those bozos all self-identify as Republicans, the choice for Alaskans would seem to be clear. Unfortunately, things are never as clear as they appear to be, which is perhaps the text of the AEA President who cautioned against suggesting that there was anything Revelatory (the topic of the Whore of Babylon having been broached) about the Task Force discussions. No, our Dems would likely be just foolish (they certainly demonstrate such foolishness in their strident whining about assessments.)

The folk gathered around the Table at the Task Force barkfest were there because, at least ostensibly, they figured that they were so bright they could see their way to a “solution” where others could not (or were intentionally obstructing.)The humorous turn here being that we are seeing a race to the bottom between the Administration (reform) and the Legislature (cut.)  Great Taste.  Less filling.

Under the Table things were not perhaps so civil, because the hunt has been on for ways to defund public schools, and where you can’t make that fly under the flag of religious freedom, perhaps you can make that fly under the flag of freedom of educational choice, though the intent, to allow the inculcation of children with delusional commitments to the irrational and supernatural at public expense, is the same.

The Table in Ms. Bezaire’s comment was set for Pesach (Passover) which strangely enough celebrates religious freedom. And ironically enough, we once again have stood the concept of religious freedom on its head as we turn the idea of freedom from theocracy into a device to secure public funding of religious education. Round and round goes the nasty beer as we offer the bracha: Great taste!  Less filling!