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OPINION: Capitalist enlists communist to fight income tax

February 10th 12:24 pm | Dermot Cole, Alaska Dispatch News Print this article   Email this article  

For being dead lo these many years, Karl Marx is a surprise entrant in the 2017 fight over an income tax in Alaska.

I'm half-expecting appearances by Groucho, Chico and Harpo.

Thanks to a statewide ad blitz that resembles the groundwork for a political campaign, we know that Communist Karl agrees with Capitalist Bob that an income tax would be bad for Alaska.

After Karl's photo appeared in Alaska newspapers I had a vague memory of ads a decade ago in which the co-author of the Communist Manifesto was telling Alaskans that raising oil taxes would be bad for Alaskans.

Turns out that Karl and the other political notables in the Gillam ads are recycled from a 2006 ad campaign against a proposed oil tax increase.

The ads then and now quoted Karl as saying, "There is only one way to kill capitalism — by taxes, taxes, and more taxes."

It was during the final months of the Murkowski administration that the ads with pointed anti-tax comments from JFK, LBJ, Winston Churchill and Marx did their part, according to political adman Art Hackney.

"This campaign helped stop legislators from tripling oil production taxes," Hackney says on his website.

What he doesn't say is that thanks in no small part to the influence of Bill Allen, who later went to jail, the legislative wrestling in 2006 set the stage for the approval of the ACES oil tax system in 2007 under Gov. Sarah Palin.

I can find no evidence that Karl actually wrote or uttered the line Hackney and Gillam attribute to him. In 2006, Hackney said he relied on a Google search that produced 175 references, but there is nothing from the writings or speeches of Marx contained in the internet archive.

There are far more internet repetitions now of the quote, but still no original sources. Hackney said he drew the material from websites with quotable quotes.

As far as I can tell, people began attributing the line to Karl long after he had shed his mortal coil.

An equally dubious entry in the Hackney/Gillam collection is this one attributed to President Lyndon Johnson: "The 20th Century proved, if you were paying attention, that taxation is the great enemy of civilization."

The most likely source for that one is a 2001 article by James Ostrowski, not LBJ, additional evidence that mere repetition does not mean much. Hackney said he also found an internet assertion that novelist Margaret Mitchell of "Gone With the Wind" fame penned that line, so he pulled the ad.

The problem here is not the specific quotes — Hackney is correct in saying that there are many to choose from — but in putting forward debatable claims about an income tax as unassailable facts.

For instance, the advertised assertion that "every state that introduced an income tax since 1960 experienced economic decline" is inaccurate. This quote is based on a book authored by four opponents of income taxes.

Co-author Stephen Moore said in a Wall Street Journal piece last spring that it would be "Alaska's folly" to bring back an income tax.

"In my 2015 book with Arthur Laffer, Rex Sinquefield and Travis Brown, The Wealth of States, we examined the 11 states — including Illinois, New Jersey, Michigan and Ohio — that have adopted income taxes since 1960. All 11 grew more slowly than the national average and all of them had slower job growth, and in most cases the growth was way below the national trend line," he said.

The seven other states on the list are Rhode Island, Maine, Connecticut, Pennsylvania, West Virginia, Indiana and Nebraska.

Without looking at the total tax burden in each state and adjusting for the many ways in which the 50 states are not identical and why they grow at different rates, there is no basis to make a sweeping conclusion about one type of tax.

Moore's solution for Alaska? Get rid of the dividend and spend the Alaska Permanent Fund.

"This is enough money to cover the current $3 billion to $4 billion budget deficit for perhaps 20 years. Most states would kill for that kind of cash on hand," wrote Moore, a senior fellow at the Heritage Foundation.

In Alaska, many people in Alaska would kill to keep those billions in savings.

And they recognize — in ways that some rich people don't — that a reasonable compromise to preserve the dividend could include a small income tax, with Alaska retaining one of the lowest tax burdens in the country.

Gillam, one of the most successful business people in Alaska, hasn't provided details of exactly what elements of state government he would eliminate and how he would generate new revenue.

The most misleading ad in his campaign is one that claims this is all very simple — we have an oil tax system that keeps oil in the ground and out of the pipeline. That is a Denali-sized distortion.

"Alaska does not need an income tax. We need oil in the pipeline," Gillam's ad says.

I get the idea that an income tax is bad for Bob Gillam. But if he wants us to believe that an income tax is bad for Alaska, we need something other than a complete fantasy as a path forward.

Columnist Dermot Cole can be reached at dermot@alaskadispatch.com.

The views expressed here are the writer's and are not necessarily endorsed by Alaska Media, which welcomes a broad range of viewpoints. To submit a piece for consideration, email editor@reportalaska.com.

 


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