• Description

A new report commissioned by Rasmuson Foundation as part of its Plan4Alaska campaign finds that while strategies currently proposed to close Alaska's $4 billion budget gap would significantly improve the state's fiscal standing, a diversified revenue strategy is needed this year to close the gap and equitably distribute financial impact. Rasmuson Foundation commissioned the report in response to comments from lawmakers about the dearth of economic data available to gauge the impact of various revenue scenarios. "Distributional Analyses of Revenue Options for Alaska" was produced by the Institute on Taxation and Economic Policy (ITEP), a nonprofit, non-partisan research organization with a mission to ensure that elected officials, the media, and the general public have access to accurate, timely, and straightforward information that allows them to understand the effects of current and proposed tax policies. ITEP used Gov. Bill Walker's Sustainable Alaska Plan in its analysis, and evaluated its proposed reductions to the Permanent Fund dividend, and income, alcohol, tobacco, and motor fuel tax increases to determine effects on Alaskans at different income levels. ITEP found that a fiscal plan that relied heavily on Permanent Fund earnings without income tax and other forms of taxation would disproportionately impact middle-income working families and low-income Alaskans. The report also examines a variety of options to derive more revenue from the income tax and less from reductions to the dividend. Among the alternative income tax structures examined are a doubling of the governor's proposed tax, the implementation of a more progressive income tax proposed by Rep. Paul Seaton in 2015, and the enactment of a 6.4 percent flat tax on incomes over $100,000 (or over $200,000 for married couples).