A Citizen’s Guide

To the editor:

I have no problem with oil taxes based on profits per se. But I do have several questions. Can anyone tell me what a profit is? Now, I know that seems a silly question, but it’s also a tricky and contentious question, as our auditors and attorneys will soon find out.

My simplistic understanding is that profit is gross income less expenses. However, not all expenses are equal. I don’t think allowable expenses should include the cost of legal fees, judgments or any other expenses derived from disagreements with the state; any costs of environmental cleanups (can anyone say Exxon Valdez); any costs involved in meeting regulations; or any company overhead costs from anywhere outside the state; among others.

Otherwise, how will the state insist that the oil industry do anything, in the future, if 20 percent of the costs (expenses, remember) are ultimately deducted from taxes due the state? Furthermore, any costs of doing business with EPA will find us unwilling and unwitting partners to the tune of 20 percent.

How can the Legislature work on oil taxes without the gas line proposal on the table? I mean, really, how can they, as businessmen, agree to anything without seeing the whole deal? And can anyone really explain to me why they refuse to look at the proposal from the Alaska Gasline Port Authority?

Dave Lanning

Ester