The Pocketbook Reasons Most Alaskans Should Prefer an Income Tax to a Statewide Sales Tax

There are rumblings that the Alaska Legislature may pass a statewide sales tax this session and the Governor may either sign or let it become law without his signature. Although the State of Alaska needs revenues that a broad-based tax like a sales tax would bring, a sales tax is less desirable than an income tax for several reasons. One big and underappreciated fact is that most Alaskans would pay more under a sales tax than under an income tax.

Tellingly, the minority of those would pay more under an income tax than a sales tax are the highest-income people in Alaska—including a surgeon I have met who made $5.5 million in net income in one year here in the Great Land without paying a penny in broad-based taxes in this state. And there are lots of people who commute to Alaska and make money on our resources—oil and fish are two big examples—and they should pay something as well. Those non-resident workers would pay significant amounts under an income tax, but not under a sales tax.