Palin's Alaska Reaps the Windfall Profits McCain Decries

Welcome to the People's Republic of Alaska, where every resident this year will get a $3,200 payout, thanks in no small measure to the efforts of Sarah Palin, the state's Republican governor. That's $22,400 for a family of seven, like Palin's. Since 1982, the Alaska Permanent Fund, which invests oil revenues from state lands, has paid out a dividend on invested oil loot to everyone who has been in the state for a year. But Palin upped the ante by joining with Democrats and some recalcitrant Republican state legislators to share in oil company windfall profits, further fattening state tax revenue and permitting an additional payout in tax funds to residents.

No wonder she is popular with voters in a state whose residents pay no income or sales taxes but are blessed with state coffers rolling in cash at a time when all other states are suffering. Indeed, when the oil companies pay more taxes to the state of Alaska, they get to write that off against their federal tax obligation, leaving the rest of us to make up the shortfall.

The state of Alaska owns most of the oil-producing land and was getting upward of 85 percent of its budget from the oil companies that lease the fields, even before Palin helped increase the state's cut. While other states fire schoolteachers because of the economic downturn, Alaska has, as Palin indicated in accepting John McCain's offer to join him on the GOP ticket, more money than it knows what to do with. In a display of plucky arrogance at her coming-out press conference, Palin boasted deceptively that if Alaskans wanted that infamous bridge to nowhere, "we'd build it ourselves."

She originally had supported having U.S. taxpayers finance that boondoggle, before McCain and others in Congress blasted it.

Not that I blame Palin for wrangling for her state a bigger cut of oil company windfall profits; it's just not an option that will work wonders for states without oil. Of course we can remedy that by having a federal windfall profits tax of the sort that Barack Obama dared propose, and which McCain and his fellow congressional Republicans have managed to quash. Their argument, rejected quite pointedly by Palin for Alaska, is that it would discourage oil companies from investing in boosting oil field yields.

McCain derided Obama's call for the windfall profits tax, saying it would "increase our dependence on foreign oil and hinder exactly the same kind of domestic exploration and production we need." I am far more interested in how McCain handles the contradiction between his and Palin's position on windfall oil profits than whether he properly vetted her on her family-values commitment to the abstinence-only teenage sex education program.

Why is it a good thing for the folks up in Alaska to get a cut of exorbitant oil company profits, but not the rest of us, if we are all part of one nation? Didn't taxpayers from across the U.S. buy the place from the Russians? Isn't it our federally collected tax dollars that have been subsidizing Alaska more lavishly than any other state, both before and after the bonanza of oil?

Just witness the success of Palin, who, as mayor of the hamlet of Wasilla, hired a big-time lobbying firm intimately connected with the state's now-indicted Republican Sen. Ted Stevens and thus obtained $27 million in federal earmarks during her tenure. As The Washington Post calculated in a devastating report on Mayor Palin's assault on the federal treasury, her home town of Wasilla (with about 6,000 inhabitants in 2002 when she was mayor) received $6.1 million, or $1,000 per resident in earmarks, almost as much as Boise, Idaho, got this year with a population that is 30 times larger.

It obviously helped to have Alaska's now-indicted senator as chair of the Senate Appropriations Committee. And despite McCain's claims that Palin distinguished herself by breaking with Alaska's discredited Republican establishment in February, the governor sent Stevens a request for $200 million to support various state projects. With representatives like that, it's no wonder that Alaska, despite its oil boom, is still at the top of states subsidized by federal dollars, receiving $1.84 back from Washington for every $1 that Alaskans pay in federal taxes. (California receives 78 cents for every $1.)

Unfortunately, looking to Palin for advice on helping the rest of us during the oil crunch, as McCain has promised, is a bit like asking a Saudi oil minister or Russia's Vladimir Putin to provide a model for our nation's economic woes. They hardly feel our pain at the pump.

Robert Scheer is author of a new book, "The Pornography of Power: How Defense Hawks Hijacked 9/11 and Weakened America."

Comments

[DrDichotomy]

When did Alaska stop having a sales tax? According to this New York Times article she raised Wasilla's sales tax back in '96.

http://www.nytimes.com/2008/09/14/us/politics/14palin.html?hp=&adxnnl=1&adxnnlx=1221343324-tGxa66AkDRYq1tsNYpjoIw&pagewanted=all

Getting more than what you're putting in doesn't change the act of paying in. When did Alaska '86 income, and sales tax?

[TxAggie]

it is a local option.

[arthur2008]

John "Country First" McCain has wandered so far from any principles he once had that he can no longer remeber what he believed at breakfast today.

[ENOS]

CNN.COM mentions none of the Palin scandals on it's site. THIS is an outrage!

[ReasonIsMyReligion]

Why isn't this post available on the HuffPo main or politics pages?

[wayne64]

A welfare check for everyone....I'm moving to Alaska.

[zedthewizard]

this will be a tough election -- pointing out agreements between palin and obama and their differences with mccain will would only confer validity to her selection. after more research, i believe a lot of what we have heard does not make me want to like sarah palin, but as a first time reader/commenter on blogs, i'm dissapointed. this will be small stuff in the larger picture. she's not going anywhere. her speech will be fine.

the fight is over a small number of votes. three supreme court justices are possibly in play. i was glad to hear the dems putting pro choice radio commericals on air.

i'm not quite sure of legislative processes but obama has been quite active. when asked about experience and accomplishments, i wish there would be more detail. obama, like palin, needs to be more specific. i believe that obama can beat the rep. ticket on foreign policy with the war winding down. mccain's vp choice also makes pleas to swing voters a bit difficult. he needed the base and he got it. now, can the dems win the swing voters -- certainly, stay away from creationism and guns. i hate the first, so so on the second. these will be losers. but just don't talk about choice talk about palin's strict pro-life agenda. you have to get specific. no one realizes that you mean all abortions when people are pro life. the culture war just may save the democrats.

[AmHope]

Very interesting and informative article.
It must be nice--living in a state where you pay no income or sales taxes and get a percentage of oil company's profits.

[MisterCole]

Very interesting article.

This all fits in with her support of Alaskan self-sufficiency and the Alaskan Independence Party that wants to secede from the U.S. It's all about Alaska First. Of course she'll suck as much federal money as she can in the meantime. She's a perfect fit with Bush/Cheney. It's no wonder the rethugs love her. No matter what the truth is just state the opposite with conviction and con the public into voting for you. As a beauty pageant contestant/ frustrated TV anchor she's had plenty of years to rehearse the charm.

[Waltb31]

Great article on the oil deception that is the Republican ticket.

[MissDaphne]

Maybe, now, Alaska will get more of the scrutiny it deserves when it comes to federal dollars.
Bet the residents are thrilled with Sarah Palin's nomination.

[KiwisCanFly]

Thank u Robert Scheer, this was very, very informative.

[KiwisCanFly]

"when the oil companies pay more taxes to the state of Alaska, they get to write that off against their federal tax obligation, leaving the rest of us to make up the shortfall."

I didn't know this!

It has fueled me up.

[PALinda]

Palen called the Obama/Biden energy plan "naive" ... at first I thought that was an immature, unknowing remark. Now, not so much. In fact, both Obama and Biden energy independence plans are deep and comprehensive. Calling those plans "naive" perhaps is a clue that she realizes they are overlooking something specifically related to Alaska. OR more than one thing ...

Will Biden bring this up in the VP debate ... or, better yet, begin groundwork for getting it into the debate by broaching the subject soon?

Afterthough ... I wondered how the Palin family afforded a nanny when the children were young. Now I know. Wow. When I think how we struggled during those years while Alaskans sopped up $22,700 of unearned income every year ... now that makes me angry!!!

[XME]

Also how they afforded a nanny: Though they're going on about her husband being a fisherman, he only does that a month or two out of the year. His full time job is WORKING FOR BP, where he apparently makes VERY good money!

[LeftRight]

No. Calling the Obama/Biden energy plan "naive" means that she agrees with McBush in that stupid idea of drilling our way out of the current oil crisis. Since Obama has declared that drilling may be a part of his plan, but that it won't work (which is true!!!) the oilcos are scared to death of him, and are POURING money into the republican coffers, which means that McBush/Quaylin are TOTALLY in support of more drilling!!

[ReasonIsMyReligion]

Don't forget that god wants her to push through a $30 Billion natural gas pipeline.

(See HuffPo vid of her appearance before her Pentacoastal (sic) church.)

[mjc]

PALinda, don't think her vice presidency will last long enough for a debate with Joe. But don't you think it is sad that the leadership of both parties are totally committed to "drilling their way out of the oil crisis"? This country has gotten to the point that greed seems to be the common denominator.

[LeftRight]

Explain how the leadership of BOTH parties think that we can "drill our way out"? The fact is that the REPUBLICAN leadership is all for drilling, thus the "Drill Now, Drill Here, Save Money" slogan comes from Newt Gingrich. The only time that the leadership of the DEMOCRATS has said anything about it, is when Obama came out and said that he would support a bill that had alternative energy, EVEN IF the republicans were to add some crap about drilling in such a bill.

In other words, Obama said that he would not sacrifice the good in the hope for the perfect.