To the editor: A few of my friends and I were at Lunch today discussing our present dilemma about the budget veto and the permanent fund dividend. The governor has vetoed about $440 million from the Legislature’s budget passed in the regular session. At the same time, if we get what the governor is trying to distribute as a dividend, $3,000 each, that is $1,900,000,000 — $1.9 billion.
Of course, as usual, this income to Alaskans will be reported to the IRS, and most of us will be taxed on it. Assuming 58% of us pay income taxes (I know that some 42% or so of us don’t pay taxes, because they are below the minimum income levels or have deductions that give them a tax-free situation). That still means that about 15% to 20% of that $1.9 billion will go straight to the IRS as federal income taxes. That amount is in the range of $285 million to $380 million. That last number is about 86% of the $440,000,000 veto, a very substantial portion of the amount the governor took away from the state budget.
Does this make any sense at all?
Surely any clever person can see that this is just a crazy way to distribute money to us, a significant part of which would go the feds as taxes anyway.
Just taking that $440 million out of the permanent fund dividend distribution and not vetoing it from the state’s budget needs would still leave plenty of money for the PFD and allow a reasonable compromise without ruining the state with the vetoed budget.
Why give an amount of the dividend to the feds while starving ourselves? Just a clear thought about a possible compromise.
Why isn’t this being discussed?