The Seattle PI article quotes are from press releases put out by the companies, not even-handed analyses- watch what people do with their money, not what they say they are going to do. If the leases were actually terminated for lack of diligence (they should have been 15 years ago), there would be a long line of companies of all sizes lined up to bid on them. Don’t be fooled by the usual fussing from conservative absolutists. There is more than one conservative and capitalist public policy.

Do you realize that the Alaska tax in question is a severance tax, not even an income tax?

Sarah has some splainin to do.

It’s Liberal Economics 101.

No, that’s not what it is. It’s intra-Republican warfare 101: When in doubt, they’re a liberal! Watching the primaries, you’d have thought all of the GOP contenders were socialists by the things they said about each other.

Our best chance to keep Obama out of power is Palin on the ticket. A lot of respected people, from Evangelicals to Beltway pundits to pollsters agree.

Mr. Wednesday Night on August 12, 2008 at 12:43 AM

No that wasn’t me, someone just copied and pasted my comment. Can’t say I blame them, It appears the posters at Palin for VP live in some kind of fantasy land and should be aware of some actual facts. It seems the argument you guys are making is “it really isn’t a WFP tax, by the strict definition of the word”. Call it what you want it’s still a massive corporate tax increase on oil companies based on nothing but populist politics and ultimately leads to less iess investment by the industry, which helps no one. It’s Liberal Economics 101.

lowandslow

Have you been trolling over at the Palin for VP site? That exact same thing was posted there, verbatim.

More facts:

http://bulletproofdiction.wordpress.com/2008/08/11/the-windfall-profits-tax-and-gov-palin-non-issue/

Mr. Wednesday Night on August 11, 2008 at 7:14 PM

Here’s the reality of ACES after BP decided to drill Liberty oil field on federal land instead of state.

“If this were on state lands, it’s doubtful we’d have been able to move it forward,” Doug Suttles, BP Alaska’s president said. “Alaska is a very high-cost environment for the industry.”

You can try to spin it any way you want but the bottom line is, because of Palin’s massive corporate tax rates it doesn’t make investing on state land worthwhile.

EduardoOTI on August 11, 2008 at 3:14 PM

You mean there’s another side to the story? Imagine that.

This is an attempt by a liberal paper to push Obama’s tax plan by unfairly comparing it to Alaska’s “Republican” plan. It’s fine to post this article as a means of starting a discussion, but it would’ve been nice to include an explanation of the Alaska plan and the differences.

Every leader, including Reagan, has things on their record that some would describe as “liberal”. It would be factually correct, but grossly out of context, to say that Reagan supported amnesty.

Palin is specifically asked about the “windfall” tax here (by a guy who has since endorsed her for VP, I might add):

http://www.redlasso.com/ClipPlayer.aspx?id=8379cb23-af0c-46b4-b914-1824869087f9

More info on taxes:

http://www.gov.state.ak.us/aces/aces_about.php

And Jiang, McCain’s environmental policy is not a windfall profit tax. Surely you know the difference.

Here’s a current affairs multiple choice question that is dirt simple: For the second quarter of 2008, two highly pertinent financial figures reported by ExxonMobil were its net income (as calculated according to U.S. GAAP, i.e., generally accepted ac…

The Alaskan tax system basically, because it has a progressive rate, basically says that oil companies can make about the same amount of net profit per barrel of oil whether the price is $80 or $120 per barrel. It’s not exactly the same, but it’s pretty close.

Now, there is an incentive inherent in this to drill more. Drilling more means more supply. More supply means lower oil prices. Lower oil prices means a lower tax rate per barrel. But, and this is the important part, an oil company in theory would make more money (more total profits) through more drilling because they’d be selling more barrels of oil.

As an aside, there’s also an incentive towards greater efficiency. The tax takes effect after something like $25 or $30, which is considered the break even cost for a barrel of oil. If a company can figure out how to be more efficient and how to retrieve that oil for $20 per barrel, for example, then there’s an additional savings.

By contrast, a windfall profits tax addresses those total profits. The idea is to look at how much a company makes in total profits for a quarter and, depending upon conditions, to assess an additional tax.

Now, I still think, as a matter of political perception, that the language to use is that Palin is against oil companies getting per barrel tax incentives that they got at $60 or $80 per barrel. But, if the oil companies drill and prices go down, then those tax incentives or rebates come back into force. The idea is that everyone wins: If oil companies drill more, then prices go down. If they sell more barrels, then their total profit is better. And, if the state still gets its money (lower tax per barrel of oil but more barrels of oil).

Oil companies will say that it provides a disincentive to explore, but the reality is that the federal government won’t allow them to explore where the oil is. If that obstacle were removed, then there most assuredly is an incentive to explore, as oil companies would realize even greater total profits through greater supply.

That’s the theory . . . not a huge fan in practice because a progressive per barrel tax structure can be confused for a traditional windfall profits tax.