Drastic spending cuts and higher taxes all around have been momentarily avoided in Washington, D.C., but in Alaska we’re still dealing with our own version of the fiscal cliff. It’s pretty clear that spending must be curbed, but there’s a real division in our state government on whether to reduce certain taxes – namely ACES, or Alaska’s Clear and Equitable Share.
Raising the cost of doing business on energy companies is a failed strategy that’s not particular to our state. President Obama and his allies in Congress have long targeted tax credits that allow U. S. oil and gas businesses to increase production and remain competitive in foreign markets.
The reality is that energy production businesses generate revenue, create jobs and help fuel our economy. Alaska now ranks as the nation’s No. 3 oil producer, dropping behind North Dakota and barely ahead of California. We need to adopt tax policies that attract investment and increase production or be prepared for deep budget cuts and a stagnant status in energy production.