A Stitch in Haste

First, some background:

--Alaska is the second most lopsided net federal tax beneficiary -- for every $1.00 Alaskans send to the IRS, Alaska receives $1.89 in federal expenditures. See also my related posts here and here.

--Alaska is the only the state in the Union to have neither a state income tax nor a state sales tax.

--Only 25 of Alaska's 161 municipalities levy a property tax.

--Besides its nearly 2:1 federal tax subsidy, the Alaska government is primarily funded by taxes on oil and natural gas production (i.e., through higher gasoline and other energy prices paid by the rest of the country).

In other words, Alaska is pretty much a leech on the rest of America -- and, tax-wise, Alaskans have it pretty good.

But apparently not "pretty good" enough, as they are now proposing even more bloodsucking:

A citizen's initiative to tax the cruise ship industry and enforce stricter environmental standards has been approved by Lt. Gov. Loren Leman for the August 2006 primary. The initiative would institute a $50 head tax and a 33 percent tax on onboard gambling revenue, and would subject the industry to Alaska's corporate income tax.
...
Taxing the industry could lead to a decline in cruise ship travelers visiting the state, according to John Hansen, president of the North West CruiseShip Association. "We're very concerned about the elements of the initiative," Hansen said. "We believe it has significant implications for all of Alaska."
...
The cruise industry sends about $800 million to the state annually through taxes, sales, shore excursions and visitors staying in hotels, Hansen said. The industry also is a good marketing tool for the state, he said. "A lot of people first visit by cruise and then they come back," Hansen said.

Just one small problem: onboard gaming occurs exclusively in international waters. Alaska can't tax it.

The Constitution has many nooks and crannies. One that doesn't get much attention is Article I, Section 10, Clause 3:

No State shall, without the Consent of Congress, lay any Duty of Tonnage, keep Troops, or Ships of War in time of Peace, enter into any Agreement or Compact with another State, or with a foreign Power, or engage in War, unless actually invaded, or in such imminent Danger as will not admit of delay.

"Duty of tonnage" means taxing ships for what they do at sea rather than what they do in port. The Supreme Court has made it clear that the term "duty of tonnage" means any tax, fee or surcharge on a ship that is not directly related to use of the port itself. See Clyde Mallory Lines v. Alabama, 296 U.S. 261, 265 (1935). In other words, the Alaska initiative is expressly forbidden by the Constitution.

Which isn't stopping Alaska parasites from putting it to a vote anyway.

But take a step a back from the Constitution for a moment. By what logic or moral theory does Alaska or any state dare try to tax anything that occurs, not only outside the state, but outside the country? Try to imagine New York City deciding that, as the price of being able to visit our fair metropolis, tourists had to pay a special "visitors income tax." Try to imagine Florida demanding 33% of all JetBlue's systemwide revenues just for the privilege of landing planes in West Palm Beach. Try to imagine if California tried to confiscate 33% of Las Vegas' casino revenues "just because."

(And keep in mind, we are talking about 33% of the the cruise ships' gaming revenues, not their profits.)

It's been almost 46 years since Alaska was admitted to the Union. Isn't it time for Alaskans to start carrying their own weight, paying for their own government and stop trying to squeeze money from everyone but themselves?

Shame. Shame. Shame.

Related Posts:
"Working on the Highway..."
Which States Have the Best/Worst Tax Policies?
Should State & Local Taxes Be Deductible?
Red Tax, Blue Tax

(Cross-linked at Outside the Beltway.)