A fiscal plan proposed by Alaska House leaders would reinstitute a personal state income tax for the first time in decades and use earnings from Alaska’s oil-wealth fund to help pay for government.
The measure would annually draw from fund earnings 4.75 percent of an average of the fund’s market value. One-third of the draw would pay for the annual dividends Alaskans receive from the fund. The rest would go to the state treasury.
The bill also establishes an income tax under which people would be taxed at 15 percent of the amount they pay in taxes to the federal government, or $25, whichever is greater.
Many legislators see use of Alaska Permanent Fund earnings as inevitable as Alaska grapples with a multibillion-dollar deficit. But an income tax could be a tough sell, particularly with the Senate’s Republican-led majority.