This particular conversation was notable because it was largely with Daniel McDonald, who, in his day job, serves as Press Secretary to the Alaska (largely Republican) Senate Majority. The Senate Majority has passed legislation the last two years that would permanently cut the Permanent Fund Dividend (PFD) in half, and this past session voted to reduce (i.e., tax) statutory income from the PFD otherwise due Alaskans at a 50% rate rather than cut government spending further.
Throughout the debate over taxing the PFD some of the strongest arguments against doing so have been the results of some economic analyses done last year by the University of Alaska-Anchorage's Institute of Social and Economic Research ("ISER"), at least in our view the state's best economic think tank.
In various studies ISER economists have concluded that cutting the PFD:
- “Has the largest adverse impact on the economy [of all the new revenue options] per dollar of revenues raised,” https://goo.gl/ZxR1Hw at A-15;
- Is “by far the costliest measure for Alaska families,” https://goo.gl/ivf9D2 at 1; and
- “[W]ill likely increase the number of Alaskans below the poverty line by 12–15,000 (2% of Alaskans),”https://goo.gl/iuTjv2 at 14.
Other parts of the studies have been cited often during the state's fiscal policy debates for other findings related to the impact that cuts in government spending would have on jobs.
But when it comes to the PFD, those advocating reductions have responded to the studies largely with radio silence, at least publicly going out of their way to ignore the analysis and conclusions.
We have often wondered why that is. While McDonald made clear that he was speaking for himself and on his own time in the discussion, his reaction offers at least some insight into how at least some in Juneau are justifying that approach behind the scenes.
The irony is that the same arguments he makes below also undercut the portions of the ISER studies that some others, including some members of the Senate Majority, have used to justify maintaining current government spending levels.
But consistency among those seeking to impose a targeted income tax on PFD income generally has been rare in any event. The discussion with McDonald, for example, started as a branch off of a claim by a former staffer to the House Republican Minority Leader that members of the House Republican Minority consistently had voted earlier this year against "income taxes," overlooking the fact that at least ten of the members did that very thing by voting for substantial reductions (i.e., taxes) on income derived from the PFD when a proposal to do so came over from the Senate.
For those interested in context, the overall discussion of which the following is a branch starts here, https://goo.gl/sqRw5j.
But when it comes to the PFD, those advocating reductions have responded to the studies largely with radio silence, at least publicly going out of their way to ignore the analysis and conclusions.
We have often wondered why that is. While McDonald made clear that he was speaking for himself and on his own time in the discussion, his reaction offers at least some insight into how at least some in Juneau are justifying that approach behind the scenes.
The irony is that the same arguments he makes below also undercut the portions of the ISER studies that some others, including some members of the Senate Majority, have used to justify maintaining current government spending levels.
But consistency among those seeking to impose a targeted income tax on PFD income generally has been rare in any event. The discussion with McDonald, for example, started as a branch off of a claim by a former staffer to the House Republican Minority Leader that members of the House Republican Minority consistently had voted earlier this year against "income taxes," overlooking the fact that at least ten of the members did that very thing by voting for substantial reductions (i.e., taxes) on income derived from the PFD when a proposal to do so came over from the Senate.
For those interested in context, the overall discussion of which the following is a branch starts here, https://goo.gl/sqRw5j.
