Sunday, September 7, 2008

Conservatives Question Palin’s Fiscal Conservatism

Cato’s Chris Edwards focuses on the tax side:

On tax policy, Alaska governor Sarah Palin has a rather uninspiring, albeit brief, record. The following is some information gleaned from State Tax Notes.
Palin supported and signed into law a $1.5 billion tax increase on oil companies in the form of higher severance taxes. One rule of thumb is that higher taxes cause less investment. Sure enough, State Tax Notes reported (January 7): “After ACES was passed, ConocoPhillips, Alaska’s most active oil exploration company and one of the top three producers, announced it was canceling plans to build a diesel fuel refinery at the Kuparuk oil field. ConocoPhillips blamed the cancellation on passage of ACES [the new tax]. The refinery would have allowed the company to produce low-sulfur diesel fuel onsite for its vehicles and other uses on the North Slope, rather than haul the fuel there from existing refineries.” There are good reasons for an oil-rich state to tax oil production, but a fiscal conservative would usually use any tax increase to reduce taxes elsewhere. Perhaps I’m missing something, but I see no evidence that Palin offered any major tax cuts. She did propose sending $1.2 billion of state oil revenues to individuals and utility companies in the form of monthly payments to reduce energy bills, but that sounds like welfare to me, not tax cuts.
Palin has offered a few narrow or minor tax breaks, including:

A tax credit for film production in the state, offering about $20 million per year in breaks.

A cut in an annual business license fee from $100 to $25 (the legislature went half way to $50).

A one-year suspension of the state fuel tax to save taxpayers about $40 million.
A repeal of tire taxes to save taxpayers $2 million.

A tax credit for commercial salmon harvesting to save taxpayers about $2 million.

That’s about it.

Andrew Sullivan says Palin is a Bush-Cheney fiscal conservative:

low taxes, unprecedented new spending, utter incompetence, endemic cronyism and massive debt.

And Sullivan has the facts to back this up.

3 comments: said...

Her fiscal record as mayor of Wasilla, AK is also pretty much of a farce. She cut property taxes, but replaced them with sales taxes. Reportedly the budget of Wasilla was balanced when she took over, but was $20 million in debt when she left. Why? She borrowed money to build a sports complex while the city has no storm drains off streets or a sewage treatment plant. But then, this latter pretty much fits in with her opposing making any efforts to save polar bear in terms of environmental policy. said...

Also, while she raised taxes on the oil companies, not necessarily a bad thing, if not fitting in with her image as an anti-government tax cutter, she handed out surpluses from the state budget to citizensn as cash, while borrowing money to build roads. Seriously incompetent.

Jack said...

It is often forgotten that one can interpret fiscal conservatism in a number of ways. Fiscal conservatism as practiced in modern times, last three decades should define it well enough, refers to the intention to conserve wealth for a tiny sector of the population that already have control of the vast majority of the wealth of the nation. In this case we often confuse the use of the term conservative to mean an ideology that falls back on established concepts and often includes limiting the role of government in economic and social affairs of the people. This is not
a correct interpretation of the term as used in fiscal conservative. Instead it refers to keeping what's mine and adding to that by taking what is yours. This is also an example of reference to a past ideology. Such fiscal conservatism was practiced during feudal times and, more modernly, during that period leading up to the Great Depression often referred to as the Gilded Age.