CATO On Palin’s “Fiscal Conservative” Record
By Justin Gardner | Related entries in 2008 Election, Economy, Palin, Republicans, TaxesPalin supported and signed into law a $1.5 billion tax increase on oil companies in the form of higher severance taxes. One rule of thumb is that higher taxes cause less investment. Sure enough, State Tax Notes reported (January 7): “After ACES was passed, ConocoPhillips, Alaska’s most active oil exploration company and one of the top three producers, announced it was canceling plans to build a diesel fuel refinery at the Kuparuk oil field. ConocoPhillips blamed the cancellation on passage of ACES [the new tax]. The refinery would have allowed the company to produce low-sulfur diesel fuel onsite for its vehicles and other uses on the North Slope, rather than haul the fuel there from existing refineries.â€There are good reasons for an oil-rich state to tax oil production, but a fiscal conservative would usually use any tax increase to reduce taxes elsewhere. Perhaps I’m missing something, but I see no evidence that Palin offered any major tax cuts. She did propose sending $1.2 billion of state oil revenues to individuals and utility companies in the form of monthly payments to reduce energy bills, but that sounds like welfare to me, not tax cuts.
Palin has offered a few narrow or minor tax breaks, including:
- A tax credit for film production in the state, offering about $20 million per year in breaks.
- A cut in an annual business license fee from $100 to $25 (the legislature went half way to $50).
- A one-year suspension of the state fuel tax to save taxpayers about $40 million.
- A repeal of tire taxes to save taxpayers $2 million.
- A tax credit for commercial salmon harvesting to save taxpayers about $2 million.
That’s about it.
Listen folks, this is simply a matter of honesty. You shouldn’t go around claiming you’re a fiscal hawk if your record doesn’t back it up. Just come clean and talk about the tough issues that Alaska faced and how you think you made the right decisions given the information at the time. No need to hang on to tired partisan labels just for the sake of hanging on. It’s that type of honesty Americans are looking for, and the sooner Palin and McCain realize this, the better the conversation will become.
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September 7th, 2008 at 5:14 pm
Fair enough Justin. Now how about Obama stop acting like he is bipartisan when is record is not. 96% voting with your party is not bipartisanship. Working on one bill with Luger is not enough imo.
September 7th, 2008 at 5:28 pm
I don’t think that most of the people who like Palin like her because of her economic acumen. She passes the religious conservative test, and to this influential group, economics take a backseat to their key social issues.
I listened to a religious/social conservative leader (tuned in halfway through so I missed his name) positively crowing about how his people had forced McCain to jettison Lieberman because of their cries of outrage. They’re thrilled with the Palin choice.
She may not be consistent on economic issues – and might even be at odds with McCain on some of it – but I’m not sure it’ll make a big difference in the way she’s seen by conservatives.
September 7th, 2008 at 7:17 pm
Justin,
Good luck explaining to the American people why standing up to big oil, slapping an additional tax on them, and returning the money to the people is a bad thing. Keep up the good work.
September 7th, 2008 at 7:44 pm
The Dems don’t need to show it is a good thing or a bad thing, only that it demonstrates a pattern of lying.
Most people could care less if Alaska taxed or didn’t tax oil because it doesn’t impact them–but they do care when people lie to them over and over again.
People don’t like to be played for fools and that is what the GOP is doing with Palin.
September 7th, 2008 at 8:26 pm
…
Both you guys stole my thunder. None-the-less, your statements deserve repeating anyway!
September 7th, 2008 at 11:05 pm
BBQ… your statement about how Obama votes with the democrats may be true, but McCain voted with Bush 95% of the time in that same period. So if thats your arguement neither one of them can say they are bipartisan.
On that note lets think.. would you rather have 4 years of 95% of bush’s broken policies, or 4 years of 96% of the OTHER policies.. i know my answer.
September 7th, 2008 at 11:25 pm
Steeve,
I think you are framing the choice correctly. But, that is a classic Republican vs. Democratic partisan election choice. What it most decidedly is not, is any kind of new politics, or “change” from the same old ways of doing things. It does not help Obama when it is clearly understood that the election is not about changing the way things are done in Washington, but just about replacing partisan Republicans with partisan Democrats in the same old corrupt game. I do agree, however, that is exactly what the Obama campaign is really all about.
September 7th, 2008 at 11:29 pm
Oh, and just to nitpick. The correct number for McCain in that one year time frame is 90% not 95%. Obama was between 97%-98%.
September 7th, 2008 at 11:45 pm
I don’t disagree that Obama’s bi-partisan record could be stronger. I feel many of us who are supporting him are taking a gamble on whether or not he can deliver what he says. But I’m willing to take that chance because he’s definitely going to be delivering different priorities than Bush, the most baldly partisan President in modern times. McCain will deliver a very similar agenda’s to Bush. How can you claim to “change” the country when you’re going to move it into a virtually identical direction?
However, to the point at hand, Palin claims that she is a fiscal conservative. CATO disagrees. That’s significant, don’t you think?
And mw, agreed that the tax and give will be popular with the American people. In fact, I’m not arguing against that. I actually favor an idea like that. However, it’s definitely not fiscally conservative, right?
So, to state again, I want Palin and the McCain camp to just be honest about this stuff. And I want her to submit to the same public vetting that everybody else has. Otherwise she’s just a publicity stunt.
September 8th, 2008 at 12:40 am
Sara Palin has been put in a protective bubble since her nomination for vp.It’s amazing to me to hear so many women saying that they can relate to Sarah the hockey mom and feel she is ready to be president let alone vice president !!! She was a virtual unknown before this nomination. She hasn’t even been to Washington D.C. for crying out loud. When she was mayor of that small town in Alaska she left it in debt when she moved on to governor. Her claim to fame is listing an airplane on ebay.I guess we will have to wait until she gets to the debate before she she is let out of this bubble,I don’t know, maybe they will find a way to keep her in it. What do the republicans call her? The hot chick from the coolest state,give me a break. leaders of other countries are having a good laugh at our expense. Hard to believe.
September 8th, 2008 at 1:32 am
The entire debate about “bi partisan” is framed in a stupid way. You assume that Obama breaking with the dems on issues would have been a good thing. I believe that that would have been a mistake on the issues that matter. The FISA vote was bad enough and that should be considered as part of his “bi partisan” record under the current framing. The basic presumption that breaking with the party is always a good thing is flawed. Case in point is the GI Bill where McCain broke with everyone and introduced his own bill, what a maverick.
Also people would do well to look at Obama’s actual record on thomas as opposed to simply propagating the perceived wisdom. Looking at 2007, compared to McCain, Obama has consistently gotten more support from across the aisle on more bills than McCain. Going back to previous congresses is much more difficult to do because of the nature of the system but i dont expect it to be such a big change.
Unlike McCain, Obama has not run away from his past efforts with the other side. How much of his vaunted bi-partisan legislation does McCain stand behind today?
As far as the tax issues go Palin can’t come clean. The GOP at a leadership level is all about moving lockstep with a core number of issues. Taxes are evil is one of those issues. Asking her to do something other than go with the flow would undercut the GOP’s argument. There is no flexibility
September 8th, 2008 at 7:38 am
I wonder if you took a poll of CATO, what percentages would be voting for McCain or Obama. Hummm. That is a real stumper…
September 8th, 2008 at 8:38 am
Yeah, if Palin needs to “be honest” about whether she’s a fiscal conservative, then democrats need to be honest about whether or not they think such actions (taxing a rich powerful thriving industry) are a good idea or a bad idea.”
Let’s not forget to notice that when it comes to fiscal conservatism, places like CATO are talking about ideological fealty to a certain constellation of policies.
But there’s another everyday joe version of ‘fiscal conservatism” that says you spend within your means and do what you need to do to balance income and expenditures, even if the actions are painful. In that light, I’m wondering whether Alaska simply needed the money.
I’ll cheerfully agree that McCain and Palin are hammering pretty hard on the doctrinaire version of fincon, so they deserve to be held to that standard. But personally, I’m untroubled to discover evidence that Palin might, if necessary, raise taxes on thriving industries as one part of a strategy to bring spending back in line with income. They’re so apart right now for the fed budget that the gap can’t be bridged without both spending cuts and carefully tax increases.
Here’s the thing. Tax rates are in many cases lower than they used to be where the GOP has been able to make changes. And that has had some beneficial effects on the economy. Are we near a point where the benefits will diminsh?Contrary to the doctrinnaire fincon view where every tax cut is desirable, there’s actually an indeterminate sweet spot where tax policy balances out. Unless we want to cut all taxes and disband the government, we have to balance out the health of the economy with the need for government to collect taxes to provide desirable gov’t services.
So my personal evaluation of the behavior of candidates goes to the joe-bag-of-donuts notion of financial conservatism, of being ready to make the adjustments needed, and of being realistic about the available government means to fund the sorts of things many folks wish the government would provide.
Like free universal healthcare on top of social security and medicare. Remember, if we get universal healthcare, it won’t really be free. Someone will be paying for it. Most of us, probably.
September 8th, 2008 at 9:03 am
@J.Harden
Interesting question. Libertarians in general are always on the horns of a dilemma in presidential elections. Neither candidate or party truly embraces libertarian principles. It is always about who will inflict the greater damage to economic or civil liberties. It is always a lesser of two evils choice for libertarians.
There is probably a much higher percentage of Bob Barr voter at CATO than the electorate at large.
Two of the biggest proponents of voting for divided government to restrain the growth of the state are at CATO, William Niskanen and <a href=”http://www.cato-at-liberty.org/2007/08/23/finally-some-not-so-bad-news-on-the-budget/” Stephen Slivinski.
September 8th, 2008 at 10:22 am
As an economic libertarian mw, there really is no question here. Obama is a Keynsian nightmare, a very-old school tax & spend liberal that promises near total socialization of any sector that does not live up to his supply & demand & price expectations. We should all take note of where this kind of stuff gets you as Fanny Mae and Freddie Mac are officially nationalized, why? Because HUD mandated these entities to buy these subprime shit loans? Why? Well, to fascilitate the “hope we can believe in”(TM) of low-income & minority home-ownership. It is always nice when the government steps in to solve a problem they helped create.
Hi, we’re with the federal government and we’re here to help.