Anyone who thinks Alaska’s current population of almost 800,000 people too big should be all down with Gov. Bill Walker’s plan to reintroduce the income tax, according to Forbes magazine.
“Each and every state (there are 11 in total) that introduced the income tax since 1960 has experienced decline across a broad array of metrics. In terms of population, all eleven states have declined in comparison to the remaining 39 states (West Virginia is the unenviable ‘leader’ of this pack, with a relative population decline of a full 50 percent),” writes Travis H. Brown, one of the co-authors of “An Inquiry into the Nature and Causes of the Wealth of States.”
A 50 percent population decline would put Alaska back near where it was in the days before construction began on the Trans-Alaska Oil Pipeline in 1975. A 50 percent population decline could, in theory, also lead to a 50 percent reduction in the need for state bureaucracy.
A 50 percent reduction in government would get the state budget near to what existing oil revenues can support, eliminating the need for income or any other new taxes. The Brown story almost makes one wonder if the state shouldn’t just short circuit the process and start offering free, one-way airfare to any and all established Alaska residents willing to leave.
Residency in Alaska is easily established. Alaskans must endure the cold, dark north for a full year before qualifying for the Alaska Permanent Fund Dividend, which this year awarded them a record $2,072 for their endurance. The state could easily stipulate the only people to qualify for a one-way ticket south are those who collected a PFD.
Brown warns that an income tax also depresses a state’s gross domestic product, but with oil prices continuing to fall, ownership of high-value Alaska commercial fishing permits shifting to the lower 48, and Alaska fish processing on the move to China, which got a third of the 2009 harvest, Alaska’s GDP might be destined to fall anyway.
Fish are Alaska’s second most valuable resource, although, Alaska state government sees no benefit. A recent study by the University of Alaska’s Institute of Social and Economic Research concluded that given the high costs of managing and policing wild salmon fisheries, the state loses $27.2 million a year on the source or, as the Alaska Dispatch News reported it in more politically correct terms, at least for Alaska where the Seattle-based commercial fishing business wields great political power: “ISER study finds state spends more on commercial fishing than it earns.”