Limitations on Upside Profit Potential underAlaska’s Oil and Gas Production Tax(“The Problem with ACES”)<br />Roger Marks<...
Tax Rate under ACES<br />Base rate of 25% of net value (after deducting all costs)<br />Progressivity element when net val...
U.S. Tax Rate for Single Taxpayer<br />First $8,350				10%<br />Next $25,600				15%<br />Next $48,300				25%<br />Next $89...
4<br />
5<br />
6<br />
7<br />
8<br />
International Competitiveness<br />9<br />
10<br />
11<br />
12<br />
Evaluating ACES<br />13<br />
14<br />
15<br />
16<br />
Possible Fix?<br />17<br />
Fix?Bracketed Tax Rates<br />HYPOTHETICAL EXAMPLE*<br />$0/bbl - $30/bbl 		 		25.0%<br />Next $15/bbl ($30 - $45/bbl) 	 		...
19<br />
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Roger Marks: The Problem with ACES

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Roger Marks presents "the problem with ACES." Alaska's oil and gas policy

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Roger Marks: The Problem with ACES

  1. 1. Limitations on Upside Profit Potential underAlaska’s Oil and Gas Production Tax(“The Problem with ACES”)<br />Roger Marks<br />Presentation to Commonwealth North<br />October 8, 2010<br />1<br />
  2. 2. Tax Rate under ACES<br />Base rate of 25% of net value (after deducting all costs)<br />Progressivity element when net value per barrel exceeds $30/bbl:<br />(Net value per barrel value - $30) X .004<br />So if oil price is $80/bbl:<br />Net value per barrel is about $55/bbl<br />Progressivity = ($55 - $30) X .004 = 10%<br />Total tax rate = 25% + 10% = 35%<br />APPLIES TO ENTIRE NET VALUE<br />2<br />
  3. 3. U.S. Tax Rate for Single Taxpayer<br />First $8,350 10%<br />Next $25,600 15%<br />Next $48,300 25%<br />Next $89,300 28%<br />Next $201,400 33%<br />Anything over $372,950 35%<br />3<br />
  4. 4. 4<br />
  5. 5. 5<br />
  6. 6. 6<br />
  7. 7. 7<br />
  8. 8. 8<br />
  9. 9. International Competitiveness<br />9<br />
  10. 10. 10<br />
  11. 11. 11<br />
  12. 12. 12<br />
  13. 13. Evaluating ACES<br />13<br />
  14. 14. 14<br />
  15. 15. 15<br />
  16. 16. 16<br />
  17. 17. Possible Fix?<br />17<br />
  18. 18. Fix?Bracketed Tax Rates<br />HYPOTHETICAL EXAMPLE*<br />$0/bbl - $30/bbl 25.0%<br />Next $15/bbl ($30 - $45/bbl) 28.5% <br />Next $15/bbl ($45 - $60/bbl) 32.0%<br />Next $15/bbl ($60 - $75/bb l) 35.5%<br />Next $15/bbl ($75 - $90/bbl) 39.0%<br />Next $15/bbl ($90 - $105/bbl) 42.5%<br />Next $15/bbl ($105 - $120/bbl) 46.0%<br />Anything over $120/bbl 50.0%<br />* This example is only illustrative of a bracketed tax structure. The actual brackets and rates need to be designed very carefully and this by no means represents a proposal for suggested brackets and rates. <br />18<br />
  19. 19. 19<br />
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