Alaska needs an income tax now

By Robin Smith for The Cordova Times

Alaska is the only state that doesn’t require taxes from its citizens to run the government. Alaska has been fortunate to have had sufficient oil income since 1980 to pay all the bills and send each of us a check every year. That time is over with the continuing pressure on oil prices.

It is true Alaska spends significantly more money per capita than any other state.
We do this in four main ways: providing services to Alaskans, building and maintaining statewide infrastructure, paying PFDs and saving for the Future. Low-population, rural states are expensive to run. We require the same institutions as other states, yet ours is geographically the largest state in the country and we divide those expenses over very few people.

Over the past two years the Legislature has reduced the general fund spending by 25 percent. Most of the “fat” has been cut. We still have a fiscal gap of $3 billion.

Why do Alaskans think they shouldn’t have to pay for services the state provides?
People say they don’t want taxes and they don’t want their PFD cut. They never say what services they get from the state they are willing to give up.

The Alaska Chamber is running ads against an income tax. Their businesses require roads, educated employees, courts, law enforcement and all the other services that a state government provides. How will we pay for those services? What cuts should we make? The Chamber offers no solutions.

I commend the House Majority for creating a plan that spreads the financial costs more fairly amongst Alaskans. They are statesmen not politicians, risking their future elected offices for the best interest of Alaska. It is time for Pete Kelly and the Senate Majority to join the House, make these hard decisions and prioritize the economy over keeping their seats.


With the abundance of oil in the market and the price of solar power dropping by 20 percent in just this past year, oil may never again be the singular engine that drives our economy. It’s time to diversify our revenue stream. Everyone must pay.

• An income tax will provide the state with much needed financial stability. It takes more money from the richest Alaskans who have succeeded due to the opportunities the state has given them. It will also tax the 20% of Alaskan employees who live out of state who make large salaries in the oil and mining industries. Many lower income Alaskans would be exempt.

• A sales tax targets everyone but is a large percentage of a low-income family’s budget. Already many communities have a sales tax to fund their needs. All cities and communities across Alaska will most likely be implementing a sales tax to replace the money the state won’t be distributing to them.

• Reducing the PFD hurts low-income families the most. It is the harshest cut because it hits every individual child as well as adult. These families spend their PFD checks, which spurs our economy unlike wealthy families who typically put it into savings.

• We simply don’t have the money to pay oil companies more in tax credits than we are getting from them.

It is important to everyday Alaskans to continue getting a PFD. If the Senate Majority continues the plan of raiding our constitutional reserves to fill the budget gap, Alaskans will lose their PFDs in just a few years. A broad-based tax revenue would grow as our population grows. Additional cuts will only prolong the recession we are entering. The Senate must act.

I want a state that provides high quality education for our children. I want children to be safe in their homes and communities. I want a state that can respond to wildfires and floods, a state that protects our salmon; and celebrates the wild environment in which we live. All this takes money.

Even with the income tax, Alaskans will have the fourth lowest tax burden in the US. We are privileged to live in Alaska. The time has come to pay for the privilege.

My husband and I own a small business. We are in the highest tax bracket. We are willing to pay our fair share to keep Alaska strong. How about you?

The author and her husband are owners of a small business in Anchorage.