For Immediate Release: August 26th, 2013
Senator Wielechowski Releases Reason #2
To Repeal Senate Bill 21, the Oil Wealth Giveaway
Today, Senator Bill Wielechowski released the 2nd of 52 reasons to repeal Governor Parnell’s Oil Wealth Giveaway. The reasons are being posted on ItsOurOil.blogspot.com as well as on Senator Wielechowski’s Facebook page. Alaskans with additional reasons to repeal The Giveaway are invited to submit their ideas to repealSB21now@gmail.com for posting.
Experts Repeatedly Warned Legislators that Cutting Taxes
Would Have a Negligible Effect on Production
Legislators were advised on numerous occasions by independent economists that lowering oil taxes would result in minimal increases in production. “Severance tax rate cuts substantially reduce tax revenue collected, but yield moderate to little change in oil drilling and production activity,” cautioned Professor Mitch Kunce, author of “Effectiveness of Severance Tax Incentives in the U.S. Oil Industry.” He emphasized that “States should be wary of arguments asserting that large swings in oil field activity can be obtained from changes in severance tax rates.”
Dr. Shelby Gerking echoed this warning. In 2012, he told the Alaska Legislature that “Oil production is quite insensitive to the tax structure” and presented the following slide. In spite of these clear warnings, the legislature passed the misguided Senate Bill 21.
For more information, call 242-1558 or 321-1944.