Wednesday, September 10, 2008

Palin's Alaska - A State Unlike Any Other

[Before beginning, I give you these numbers - 1841, 1850, 1865, 1881, 1901, 1923, 1945, 1963.]

Many people have pointed out that the closest thing to foreign policy experience for Sarah Palin is when she eats Belgian Waffles at the Wasilla International House of Pancakes. Similarly, it has been noted that she has zero experience in the domestic issues facing the Federal government. But there is something arguably worse. She hasn't had the kind of experience faced by most State governors.

Sarah governs a state like no other. When you put aside all the little hot button issues, most decisions that state governors and legislatures face revolve around two sets of questions. First is the question of revenue. Who should be taxed and how much should they be taxed? Second is the question of expenditures. What programs should get the money and how much should they get? Well, when it comes to the first set of questions, the most difficult ones, Sarah's experience leaves her uniquely unqualified to be the governor of any other state let alone, heaven forbid, the United States.

Here is the resource book published by Alaska's Department of Revenue in the fall of 2007. It shows actual revenues and expenditures for 2007 and projections for 2008 and 2009. Let's look at the 2008 numbers.

For 2008 Alaska plans on collecting $13.2 billion. Half of that amount, $6.6 billion, comes from oil taxes. $3 billion comes from income on all the investment the state has. $2.5 Billion comes from the Federal government. The smallest category, $1.1 billion, comes from licenses, fees, royalties and taxes on mineral companies and the like.

Of the many things that jump out is the $3 Billion in investment income. The United States has almost $10 Trillion dollars in outstanding debt that will require us to pay more than $450 billion in interest on the national debt in 2008. The deficit for just this year is over $400 billion. And of that amount $2.5 billion is money that we borrowed so that we could give it to Alaska, a State that is so awash in cash that it earns $3 billion on its investments. The mind is past boggling.

Next, look at the oil revenue, $6.6 billion. This number is actually much lower than the actual number of $8.9 billion for 2008. That number grew so much because the Alaska's taxes are tied to the price of oil. As oil prices go up, oil company revenues go up and Alaska demands a piece of the action. Sounds an awful lot like a windfall profits tax, doesn't it. That's the kind of tax Obama wants to enact but Mccain opposes. McCain argues that such a tax would stifle new exploration. Of course, we know that is total baloney as made clear by the Alaska experience. Alaska's profits tax on oil hasn't stopped the oil companies from exploring in Alaska. I'd love to see Palin explain why something so good for Alaska is bad for the United States. But I digress.

The main thing this budget reveals is that Palin has never had to face the hard choices about who to tax and how much to tax that are faced in the other states and magnified a thousand fold for the Federal government. She has no knowledge of the complexities of the income tax code. Her experience has not exposed her to the concept of an individual income tax structure that is supposed to be progressive, one in which the tax burden is the largest on those most able to bear it. The Republicans have done their best since 1980 to whittle away at this concept, but it is an idea that is totally foreign to Alaska.

She doesn't have any exposure to the social security and medicare tax system and how they are integral to the welfare of our seniors. She doesn't really know anything about the corporate tax system, which has a marginal rate of 35% but results in an effective tax rate that is far less and in which two thirds of corporations pay no taxes

When you leave the foreign affairs realm, many of the most contentious debates a President face involve the budget. Where to get the money for Head Start, health care, education, environmental protection and on and on. No one wants to pay taxes, but someone must. Sarah lives in a state that is riding the type of gravy train that has immunized her from having to face these tough choices. It is hard to imagine anyone less qualified to serve as President of the United States.

Oh, yes, the numbers at the beginning. Those are the years in which a President has died in office. Eight Presidents have died in office. Every one of those events has been tragic. That tragedy is compounded immeasurably if the Vice President is unqualified to take the reins of government.

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