What Fiscal Conservatism?

It's increasingly clear that yet another myth that the McCain campaign concocted about Sarah Palin's record in Alaska is now evaporating into thin air. Here's CATO's Chris Edwards' report on her tax record (hat tip: Jeff):

Palin 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.”

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.

The selling of Sarah Palin has been about as reliable as the vetting.