The latest Frank Murkowski-induced "screw job" on the residents of Alaska came home to roost today... read this ADN report on the $800 million shortfall in "expected" revenue this first year of the Petroleum Profits Tax (PPT).  And that's just the first year... so it would be reasonable to conclude that the assumptions built into the tax are invalid for every year afterwards too.

Anyone with even the slightest bit of accounting knowledge could see this outcome in the making; large corporations of the sizes involved here have numerous perfectly legal tactics to reduce apparent and reported profits, thus allowing them a great deal of control over the actual amount of taxes paid.  If you want to know how much... note in the ADN article that the state cannot even find accountants capable of auditing these large corporations (hint: even the IRS takes around 7 years to get an agreement on the actual federal corporate returns these companies file using all the resources of the IRS, so you can imagine what it's going to take for a state to do the same... that's one big reason I opposed a tax on profits, why even sign up for that kind of auditing requirement?).

This article on the AK state web site points out the influence Murkowski personally had in ensuring the tax rates would be set lower than the residents who votes hadn't been bought and paid for by the same oil companies affected by the tax would have preferred, even if we had to be stuck with a tax on (legally well-adjusted) profits alone.

However, after rescuing us from Murkowski's attempts to nail the taxpayer on the gas pipeline, Palin is now set to force a re-examination of all of the assumptions built into the PPT.  Note she rightly points out the that bribed votes were sufficient to affect the outcome of the legislation and that alone is grounds for reopening the debate.  If she really wants to stir things up, she need only announce some audits or investigations of a few other "yes" voters to bring a great deal of sober thought to the special session (though perhaps the 3 she has are already enough to make the point).  I have to assume if there were 3 bribed, there were probably more than 3 (though I do assume that at least some yes votes were by people who honestly felt based on the numbers they were given it would be good for the state... numbers whose assumptions have been proven false in the very first year of the tax... so I assume that those honest people are probably interested in reopening the discussion now that they know more of the reality).

As the ADN article points out, it probably really is too early to tell what the true long term effect is.  However, given that the bribed legislators were sufficient to swing the vote, that single fact alone makes it important to re-examine the assumptions built into the tax and get a (hopefully) clean vote on the actual merits of the PPT... if it's really the right thing for the state then it can stand up to that debate.