Sb-21 (sales, real estate, rent)

[highlife2]

Does anyone know if there is a real risk of a state income tax being imposed if SB-21 is not repealed or is this just a scare tactic because the state wont be able to blow money like drunken sailors anymore. Of course they have the power to keep taxing and spending so I just dont know. If there was a state income tax I wonder what the implications would be as the cost of living at least in anchorge is QUITE high, we have some of the most expensvie real estate and rents in the nation.

At the very least could we see an impact to the PFD?

[cuatro01]

It's a scare tactic. What Alaskans should REALLY be concerned about is declining oil production. This state's economy has 99% of its eggs in one basket: oil. And Alaskans live a spoiled, fairy tale existence with no state income tax AND the PFD payments. In most states, residents essentially pay to live there. Even for other states that don't have an income tax, the residents certainly don't get paid by the government like we do with the PFD. Oil will dry up sooner or later, and this state will be a scary place to be when that happens. In the meantime, it's in everyone's best interest to keep as much oil flowing for as long as possible... and in a world of global oil companies, those companies need a reason to choose to invest in Alaska, when they can easily redirect that money to the Gulf of Mexico, Iraq, Azerbaijan, Brazil, the North Sea, etc.

[highlife2]

Originally Posted by cuatro01

It's a scare tactic. What Alaskans should REALLY be concerned about is declining oil production. This state's economy has 99% of its eggs in one basket: oil. And Alaskans live a spoiled, fairy tale existence with no state income tax AND the PFD payments. In most states, residents essentially pay to live there. Even for other states that don't have an income tax, the residents certainly don't get paid by the government like we do with the PFD. Oil will dry up sooner or later, and this state will be a scary place to be when that happens. In the meantime, it's in everyone's best interest to keep as much oil flowing for as long as possible... and in a world of global oil companies, those companies need a reason to choose to invest in Alaska, when they can easily redirect that money to the Gulf of Mexico, Iraq, Azerbaijan, Brazil, the North Sea, etc.

If there were suddenly a state income tax I would imagine that it would be reflected in rent prices and real estate either that or you would see a mass exodus of people out of here as it would be cost prohibitive for most people to live with with the cost of living AND additional taxes. Unless it was a modest flat tax you would see alot of the high wage oil workers going back to houston because a tax based on income would hammer most people in oil and gas.

I could care less about the dividend but an income tax would have some non trivial consequences in this state. The oil companies would have to give raises to their employees to off set the tax or they would likely start loosing people. I am a life long alaskan and I would have to consider leaving. People that are not from here would be gone over night. This could be a really bad deal for alot of people that are trying to carve out what little is left of the american dream. The sad thing is if a state income tax is implemented its our own friends and neighbors screwing each other, the oil companies will not be effected.

I just wonder how probable a state income tax really is even if SB-21 is not repealed, the back lash would have most of the state politicians out on their butts. The entire state economy and peoples metrics are based on no state income taxes.

[Dakster]

Playing devil's advocate here to stimulate some discussion. I hope that you don't loose all of the benefits to living in AK that help deal with the higher cost of living. I'll start with a concurrence on the oil company part.

Global oil companies don't have to go out of the US to invest. They can hit North Dakota and now Kansas. Both are easier to get equipment and supplies in, being in the lower 48...


Highlife2 - You are also playing a scare tactic by saying everyone would get up and leave with a state income tax or state sales tax or state property tax. AK is one of the few states with NONE of those and a PFD that pays you every year... Where are you going to go that is better, if even ONE of those are enacted? You are basically telling me you a 'fair' weather citizen and when things get tough, you get going. In all fairness, this is one of the reasons I want out of my home state.

[jdhpa]

It sounds like a scare tactic to me, but I don't think it matters much. All taxes are ultimately paid by consumers. Taxes that corporations pay are just passed through to consumers in the form of higher prices. Whether you pay 5% in income tax, or pay no income tax but spend 5% more on everything you ever buy, it's basically the same.

If you want an idea of what the 'effective' average tax rate is look at the percentage of the economy that's from government spending. Here's an interesting link with tax burden per country as a percentage of GDP:

https://en.wikipedia.org/wiki/Government_spending

[highlife2]

Originally Posted by jdhpa

It sounds like a scare tactic to me, but I don't think it matters much. All taxes are ultimately paid by consumers. Taxes that corporations pay are just passed through to consumers in the form of higher prices. Whether you pay 5% in income tax, or pay no income tax but spend 5% more on everything you ever buy, it's basically the same.

If you want an idea of what the 'effective' average tax rate is look at the percentage of the economy that's from government spending. Here's an interesting link with tax burden per country as a percentage of GDP:

https://en.wikipedia.org/wiki/Government_spending

Kind of but not really, if im making over 100k a year 5% is ALOT of money, MUCH more money than an extra 50 cents I will spend on a cheese burger. They don't have income tax in texas which is where I would be thinking about going. Property tax in anchorage is already astronomical and we have a fairly high gas tax.

I would not be sad if the PFD went away, whats $1000 a year I mean its nice but not enough to leave the state, now 7k in state income tax in addition to the fed taxes right off the top, that's starting to be real money, add that to the pfd and that's almost 10 grand just to live in a freezer most of the year. There will be a conversation with my girl friend if they start a sales tax. I worked hard to get to my income level and I don't feel like giving it away.

[jdhpa]

I've never lived in Texas, but I've lived in Florida (with no income tax), as well as states with income tax. They all find a way to get taxes out of you, though it may be obvious and direct or hidden and indirect. Property tax, sales tax, personal property tax (on cars, boats, etc.), corporate income tax or business fees (passed along as higher costs), gas tax which is lumped in with the price of the gas, etc. What determines the amount of tax is the level of spending. If spending is high per person, the amount they collect in taxes per person (by some means) must be high as well. The only question is how it's distributed.

I'll note that Alaska has a fairly high corporate income tax rate, 9.4% on income over $90K. Every time you buy from a corporation in Alaska (with more than $90K in net income), you're paying that tax in the form of higher prices.

[Dakster]

Ditto to jdhpa...

I have family in a lot of different states and I have done alot of ACTUAL cost of living comparisons. One way or the other your local government gets its money. One way or other you will pay for the services you receive. What is interesting about AK, is that you can choose to live in an area with no services and therefore little to no real estate taxes. The 'oil' also helps to fund your state services, much the same way, tourist taxes do in Florida. That seems to offset sales and income tax for you, so far.

Highlife2 - I understand completely. It took me along time to break $100k/yr too. And I don't like paying all of the new taxes my state and local government have imposed as well...

So if money is your thing and you can make more of it or keep more of it by leaving then go for it. I don't think anyone here is holding you back.

[Metlakatla]

I think the last time rrpearso threatened to leave Alaska it was because of the price of PBR and pizza.

The federal gravy train isn't going to last forever; it's not such a bad idea for Alaska to start paying its own way.

[highlife2]

Originally Posted by jdhpa

I've never lived in Texas, but I've lived in Florida (with no income tax), as well as states with income tax. They all find a way to get taxes out of you, though it may be obvious and direct or hidden and indirect. Property tax, sales tax, personal property tax (on cars, boats, etc.), corporate income tax or business fees (passed along as higher costs), gas tax which is lumped in with the price of the gas, etc. What determines the amount of tax is the level of spending. If spending is high per person, the amount they collect in taxes per person (by some means) must be high as well. The only question is how it's distributed.

I'll note that Alaska has a fairly high corporate income tax rate, 9.4% on income over $90K. Every time you buy from a corporation in Alaska (with more than $90K in net income), you're paying that tax in the form of higher prices.

Consumption tax is way better because I can choose to spend or not spend, but if the money is just taken right off the top that is much much worse. I am also guessing that the property prices in anchorage will not budge due to a new state income tax so it will be an over all net loss. If they implement it I will first seek a fat raise to off set it if I dont get it I will have to start looking else where, I dont like being penalized or demonized because I make good money that I worked hard for and want to keep. I dont mind consumption taxes because I can choose not to consume and just build my savings and perhaps spend the money else where. Income tax is basicly extortion and penilizes high wage earners because 5% on 100k is alot more than 5% on 30k.

If Alaska implements an income tax there will be alot of consequences that the state does not like, the Alaska culture the last 40 years is built on no income tax so it will be chaotic if all the sudden people are even more broke.