Competitive Framework for Alaska: 2012

Deficiencies in the current ACES system The current ACES system has five main deficiencies: 1. PPT tax rates up to 75% in addition to 41% 2. corporate income tax are too high to stimulate efficiency in operations. The price based sliding scales and result in a situation where under high prices the producer is actually better off with a lower price. 3. The excessive tax credits result in a situation where Alaska may pay all of the costs of a well. 4. The BOE concept results in a situation where new gas production could lead to massive losses of oil based revenues. 5. Under marginal circumstances the ACES system actually creates a negative PPT, in other words the government will loose PPT on certain fields. 60

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