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Alaskans for Sustainable Budgets
Follow us on Facebook, Twitter & YouTube
There is a better way ...
Some argue that government should cut
spending more instead of adopting taxes
But last session Senate Republicans voted 12-2 to
tax the PFD instead of cutting spending more
For cutting the PFD instead of spending:
Sen. Pete Kelly (Fairbanks)
Sen. John Coghill (Fairbanks)
Sen. Click Bishop (Fair...
According to ISER studies, cutting the PFD has the
worst impact on the Alaska economy & families
Cutting the PFD …
▪ Has "...
The House approach also
relies heavily on PFD cuts
-- Even with an income tax
component it still hits middle
and lower inc...
“… sales taxes tend to be regressive,
impacting low- and middle-income
families more heavily than high-
income families …”...
Unlike Senate, House & sales
tax approaches, a flat tax
treats all income brackets
the same
IF we are going there, a flat ...
“Recessions generally occur when there is a
widespread drop in spending (an adverse
demand shock) … A fall-off in
consumer...
Alaskans for Sustainable Budgets
This presentation is available on our pages at
Facebook, Twitter & YouTube
There is a bet...
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There is a better way (9.18.2017)

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IF Alaska needs to raise new government revenues, there is a much better way to do it than through PFD cuts or the other current proposals.

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There is a better way (9.18.2017)

  1. 1. Alaskans for Sustainable Budgets Follow us on Facebook, Twitter & YouTube There is a better way ...
  2. 2. Some argue that government should cut spending more instead of adopting taxes
  3. 3. But last session Senate Republicans voted 12-2 to tax the PFD instead of cutting spending more
  4. 4. For cutting the PFD instead of spending: Sen. Pete Kelly (Fairbanks) Sen. John Coghill (Fairbanks) Sen. Click Bishop (Fairbanks) Sen. David Wilson (Wasilla) Sen. Anna MacKinnon (Eagle River) Sen. Mia Costello (Anchorage) Sen. Natasha vonImhoff (Anchorage) Sen. Kevin Meyer (Anchorage) Sen. Cathy Giessel (Anchorage) Sen. Peter Micciche (Soldotna) Sen. Gary Stevens (Kodiak) Sen. Bert Stedman (Sitka) Against Sen. Mike Dunleavy (Wasilla) Sen. Shelley Hughes (Palmer) Those voting in favor gave up on making deeper spending cuts and voted to tax the PFD instead
  5. 5. According to ISER studies, cutting the PFD has the worst impact on the Alaska economy & families Cutting the PFD … ▪ Has "the largest adverse impact on the economy [of all the new revenue options] per dollar of revenues raised," ▪ Is "by far the costliest measure for Alaska families," and ▪ "[L]ikely increase[s] the number of Alaskans below the poverty line by 12-15,000 (2% of Alaskans).”
  6. 6. The House approach also relies heavily on PFD cuts -- Even with an income tax component it still hits middle and lower income families(and the economy) far harder. And the House approach isn’t any better Percent of income for average family of four taken by govt under House approach Top 20% (upper income) 4.5% Next 20% (upper middle) 5.6% Next 20% (middle) 7.8% Next 20% (lower middle) 12.4% Next 20% (low income) 24.1%
  7. 7. “… sales taxes tend to be regressive, impacting low- and middle-income families more heavily than high- income families …” ~ITEP, “Comparing the Distributional Impact of Revenue Options in Alaska” Some suggest a statewide sales tax, but that also is heavily regressive Percent of income for average family of four taken by govt using a sales tax designed to raise same revenue as Senate PFD cut Top 20% (upper income) 1.5% Next 20% (upper middle) 3.4% Next 20% (middle) 4.7% Next 20% (lower middle) 7.8% Next 20% (low income) 8.1%
  8. 8. Unlike Senate, House & sales tax approaches, a flat tax treats all income brackets the same IF we are going there, a flat tax is the much better way to raise new revenue Senate House Sales Tax Flat Tax Top 20% (upper income) 1.9% 4.5% 1.5% 2.8% Next 20% (upper middle) 5.3% 5.6% 3.4% 2.8% Next 20% (middle) 8.8% 7.8% 4.7% 2.8% Next 20% (lower middle) 15.7% 12.4% 7.8% 2.8% Next 20% (low income) 30.4% 24.1% 8.1% 2.8% Percent of income for average family of four taken by govt under various approaches
  9. 9. “Recessions generally occur when there is a widespread drop in spending (an adverse demand shock) … A fall-off in consumer demand is normally the culprit” Especially in a recession, how government raises ‘new revenue’ is critically important ▪ Taking money out of consumers’ hands makes a recession worse. ▪ Taking money disproportionately from some makes the recession disproportionately worse for them and if they spend a higher percentage in the Alaska economy, makes the recession worse also for the overall economy. Because of its huge disproportionate effect a PFD cut has the “largest adverse effect” on the overall Alaska economy and families. A flat tax spreads the effect proportionately.
  10. 10. Alaskans for Sustainable Budgets This presentation is available on our pages at Facebook, Twitter & YouTube There is a better way: If Alaska is going to raise new revenues, a flat tax is the much better approach

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