Corporate Taxes in Alaska

I was talking to a friend about the Pebble Mine and some of the things we've
discussed about the topic. It was pointed out that mining companies are only taxed at
3% and it actually ends up being less than that because the tax is based on an adjusted
income after expenses are deducted. Why it is that the oil and gas companies are taxed
many times more than that? How could one nonrenewable resource be taxed at such a
higher rate than another and why wouldn’t the oil and gas companies balk at that? I
understand that the oil/gas companies don’t like the present tax rate, but how did the
state actually make it happen? Maybe the profits from the oil/gas are just so huge that
the companies have decided it’s worth it in spite of the higher tax rate. And how did the
mining industry get such a break compared to oil and gas corporations? It sure seems
like there are significant profits that are being made by large mining corporations, such
as the owners of Red Dog mine. Obviously, if the Pebble mine is developed, the profits
are going to be staggering. So why the discrepancy in the rates of taxation? And is
there any chance that the mining tax would be increased? Don’t the minerals in the
ground belong to all the citizens of Alaska, just like the oil and gas deposits? I would
appreciate it if some of our more enlightened classmates could share some answers to
these questions.

Then I got to thinking about renewable resources and how they are taxed. What about
fisheries? I know they pay taxes on their income but not like oil and gas companies.
One source that I looked up online said that the fisheries business tax is 1 to 5 percent
of the value of fish or seafood processed in Alaska. This is a similar rate to the mining
industry. That made me wonder about the timber, tourism and other similar industries.
They all pay income tax but nothing like the oil/gas companies.

I am concerned about the high tax rates for the oil/gas companies. Their profits are
declining and are expected to continue to do so. They fuel the economy (I think there is
a pun in there somewhere) in so many different ways because they bolster all facets of
the economy, including many types of businesses. That being said, I have to disclose
my biases (which some people seem reluctant to do). I have a son and a daughter that
work for a large oil company and I want their company to do well and continue to do
business in Alaska so that their jobs and future are secure. My husband works in a
construction related field, and that business is fed by the healthy economy that we
enjoy due to oil/gas royalties in the State of Alaska. That said, in the US of A, we take
pride in fairness and equity, and I don’t know why the oil/gas companies have been
singled out for a tax penalty for their success. I’m not sure that we’re going to be able
to continue to squeeze the oil/gas companies as we have without a turndown in
exploration, production and state revenues.

Dawn Hibbert