What West Virginia can learn from Sarah Palin
It’s time for West Virginia, and the rest of America, to take a page out of the Palin Playbook. Louise and I spent the holiday weekend near Lewisburg, West Virginia. While we were there, we saw some pretty extraordinary signs of wealth. But we also saw the extreme poverty that West Virginia is known for. That extreme poverty, and the gap between the rich and the poor in that state, is being driven by the coal industry.
West Virginia’s principal industry is the extraction of coal, and most of the profits from that coal extraction (and now gas fracking) are going out of West Virginia. And the profits that do stay within West Virginia stay in the hands of a very small number of very wealthy families. But what if West Virginians were to say to the coal industry, “If you’re going to take our fossil fuels out of our state, then you have to pay us in the form of a carbon/coal tax.”
And what if all of the money that the state raked in from the coal industry each year was cycled back to the people of West Virginia?
This same sort of scenario has been playing out in Alaska, Sarah Palin’s Alaska, for over 30 years with great success. Back in 1976, Alaska established the Alaska Permanent Fund, which was designed to help all Alaskans profit off of that state’s oil industry. Since then, Alaskan citizens have received a check in the mail each year. It's essentially a "guaranteed minimum income" like many European and Middle Eastern countries have.
In 2013, the permanent fund’s Annual Individual Payout was $900.00. This year, it’s expected to be between $1,300 and $1,400. The program is incredibly popular and even Sarah Palin who’s scared straight by the slightest mention of the word socialism, supported the fund, and even raised taxes on the oil industry even more, to fund an additional $1,200 one-time payment to Alaskans in 2008.
Now imagine if West Virginia was able to reap some of these same rewards. If that state put a tax on coal and gas extraction, effectively a carbon tax, and then cycled all of the money it took in back to the people, the results could be extraordinary. Say the West Virginia government collects $3 billion from the coal industry under a coal and carbon tax in one year. That $3 billion is then redistributed to the people of West Virginia, every man, woman, and child. Based on 2012 population numbers, that would mean roughly $1,600 for every West Virginian.
The coal and carbon tax would create a transfer of wealth from the coal companies to the people that would instantly reduce poverty in the state, stimulate local economies, create demand for local goods, and encourage more local entrepreneurship. And, it would also very slightly increase the costs of coal and gas, making alternative energy sources more affordable in West Virginia, the U.S. and across the globe (much of West Virginia’s coal gets shipped overseas), and helping to keep at least some of that dirty coal right where it belongs: in the ground.
Way back in 1797, political activist and philosopher Thomas Paine wrote in his famous Agrarian Justice pamphlet that, “Men did not make the earth. It is the value of the improvements only, and not the earth itself, that is individual property. Every proprietor owes to the community a ground rent for the land which he holds.”
Basically, Paine was arguing for a guaranteed minimum income, like the one the Alaska Permanent Fund provides, for all U.S. citizens as compensation for, “loss of his or her natural inheritance, by the introduction of the system of landed property.” West Virginian coal is just that. It’s West Virginian.
It’s owned by the people, and any profits that come from it should be going back to the people. It’s common-sense and it’s good economic sense. But let’s not stop at West Virginia.
It’s time for every state to follow Sarah Palin’s Alaska model, and put in place state carbon taxes that cycle money back to the people, reduce income inequality, and spur local economic growth. It'll reduce poverty and help save us all from global warming - a definite two-fer!