• Forecast
  • News Tip
  • Categories
Temperature Precipitation
Estimated read time
1m 45s

Economist: Proposed state income tax will raise millions, but take away jobs

By Lauren Maxwell 8:08 PM February 17, 2017

Alaskans got a chance to weigh in on a statewide income tax proposal Friday. Members of the House Finance Committee held a public hearing in Juneau on House Bill 115.

Alaskans The bill would do several things, including restructuring the Permanent Fund in an effort to balance the state budget. But most of the talk has centered on a proposal to tax Alaskans and their income.

House bill 115 proposes a 15 percent tax on an individual’s federal tax liability. In other words, if you owe Uncle Sam $20,000 in taxes, your bill to the state would be $3,000.

Mouhcine Guettabi, an economics professor with the University of Alaska Anchorage’s Institute for Economic Research, has studied a variety of proposals to deal with the state’s $3 billion deficit. He said the income tax would generate about $655 million a year. As he explained, the proposal considered is a progressive tax, meaning everyone would pay, but the wealthy would pay more.

“Just because they have more income, and therefore, it would take a larger share of income out of their pockets,” Guettabi said. “It affects the poorest Alaskans the least and middle-class Alaskans are somewhere in the middle.”

Guettabi said any proposal that takes money out of people’s pockets will have an effect on the larger economy, whether it’s an income tax, a sales tax or a reduction in Permanent Fund dividends, and all of them will cost Alaskans jobs.

“The reduction of income is going to show up in you going out to dinner less often, buying less clothes or going to fewer hotels,” said Guettabi. “An income tax that raises 700 million to 650 million dollars takes away 3,500 to 5,000 [jobs] in the short run.”

The proposed tax would apply to anyone who works in the state of Alaska, even if they don’t live here. Guettabi said about 20 percent of the wage earners in Alaska aren’t residents, but they’d still have to pay the tax.

KTVA 11’s Lauren Maxwell can be reached via email or on Twitter.

Latest Stories

  • Neighbors, close family friends react to Utah man accused of murdering wife on cruise

    by Steffi Lee on Jul 27, 22:30

    A Utah man is now facing a federal murder charge — accused of killing his wife, 39-year-old Kristy Manzanares, on a cruise ship traveling in Alaska.  Kenneth Ray Manzanares, of Santa Clara, Utah, made his initial appearance in federal court Thursday. According to a criminal complaint, on July 25, Emerald Princess Security and Medical personnel responded […]

  • Politics

    Senate GOP’s “skinny repeal” bill dies in middle-of-the-night vote

    by CBS News on Jul 27, 22:13

    Senate Republicans’ attempt to repeal parts of the Affordable Care Act died early Friday morning, with three GOP senators — Sen. John McCain, Sen. Susan Collins and Sen. Lisa Murkowski — voting against the proposal. “So … this is clearly a disappointing moment,” Senate Majority Leader Mitch McConnell, R-Kentucky, said right after the bill failed. […]

  • Politics

    Larry Persily on political drama in Washington DC

    by KTVA Web Staff on Jul 27, 22:04

    Both Senators: John McCain and Lisa Murkowski, are in the center of the political drama playing out in Washington DC, with plot lines that could be straight out of a movie. Larry Persily was the federal coordinator for Alaska Natural Gas Transportation projects and has worked for three governors and advised many state legislators, including […]

  • Former pro golfers come to Alaska to help future players

    by Dave Leval on Jul 27, 20:15

    Katelin Richards gets a different challenge every time she steps on the golf course. “Right now, my short game, my chipping and putting has been off,” said the 15-year-old player. Richards and other junior golfers ventured onto the Anchorage Golf Course to improve their game. They also received some first rate help. Janet Anderson won […]

  • On-Air

    Reality Check w/ John Tracy: Sen. McCain calls for bipartisanship, but is Washington listening?

    by John Tracy on Jul 27, 19:42

    There must be something about facing your own mortality, that provides a bit of clarity on the value of your life’s work.  I think that’s what we were seeing on Tuesday when Senator John McCain cast the deciding vote on advancing his party’s healthcare bill and then proceeded to take his colleagues to the woodshed […]

  • News

    APD bike patrols covering Anchorage

    by Lauren Maxwell on Jul 27, 19:18

    The Anchorage Police Department is covering some new territory this summer and they’re doing it on two wheels. Officers on bikes are patrolling more areas than ever before. APD’s bike patrols are made up of teams of school resource officers. They work in the schools in the winter and hit the trails during the summer. […]

  • Man with hatchet charged with attempted murder on officer

    by KTVA Web Staff on Jul 27, 18:52

    An Anchorage man was charged with attempting to kill a police officer with a hatchet. Police say on May 25, around 4:28 a.m., they responded to a report of someone breaking into cars near Morningside Loop, between Old and New Seward Highways. When police arrived, they say they tried to make contact with the suspect, 32-year-old Howard […]

  • Politics

    Two House Democrats call for investigation into calls made to Alaska’s senators

    by Bonney Bowman on Jul 27, 18:24

    Two House Democrats are calling for a formal investigation after they say the Interior Secretary threatened Alaska’s senators over healthcare. Thursday afternoon, Natural Resources Committee ranking member Raul Grijalva (D-AZ) and Commerce Committee ranking member Frank Pallone (D-NJ), sent letters to the Department of the Interior Inspector General and the Government Accountability Office. They want […]