News-Miner Editorial
Small victory for spill victims
Legislation will lower taxes on damage awards in Exxon case
Published Monday, October 6, 2008
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Stumble It!Some might deride it as a “rider” or even an “earmark,” but the financial bailout act signed by the president last week carries a welcome piece of legislation for Alaskans.
The addition will allow recipients of the Exxon Valdez oil spill punitive damages to average that income over three years when paying federal taxes. This ensures their tax rates won’t jump up and they can keep more of the money. Unfortunately, this legislation is not as critical as it once was, because the U.S. Supreme Court in June awarded only one-tenth the damages initially approved by lower courts, and the resulting smaller awards will put few people in top tax brackets.
The first checks, which average about $15,000, were expected to go out early this month to approximately 33,000 litigants. The checks could almost double in size if Exxon is required to pay interest, an issue that is still in court.
In addition to permitting income-averaging, the legislation approved last week allows award recipients to put the money in retirement accounts or plans and exempts them from other taxes.
Sen. Lisa Murkowski and Rep. Don Young introduced this legislation in early 2007 after it became apparent that the Supreme Court would issue a final decision in the case. Murkowski had some success moving the legislation forward in the Senate, but the House leadership wasn’t sympathetic. They couldn’t be persuaded to accept the loss in federal tax revenue that the legislation might cause. Placing the legislation on the bailout bill was a clear success for the Alaska delegation.
Most of the people who will receive a settlement payment from Exxon are not wealthy and send a low to moderate percentage of their income to the federal government. The awards could boost their tax rates in the year they receive the money.
Allowing such a result would add insult to injury. These folks have waited almost two decades for this case to end. Many of the original litigants have died. At times across the years, many had been hoping for awards 10 times higher, based on earlier court decisions. These folks shouldn’t be hit with a one-time tax rate that doesn’t reflect their real living conditions.
Community Discussion
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Now why hasn't Palin said, "Thanks, but no thanks on those tax breaks for Alaskan fishermen?"
Could it be that she only opposes earmarks that are unpopular?
Henry, You Sir are obviously not thinking clearly or You are not from here,
If you were told by one court that you were going to receive one hundred thousand dollars (or somthing to that effect averaged out amoungst the class of litigant in which you were catogrized) for around twenty years, and then all of the sudden because of a corupted court (which just happens to be the hight court of the land) you are all of the sudden informed Oh... we can't pay you that much, if we do that our buddy who had to set this one out because he owns substantial stock in that company stands to loose a tremendouse amount of money would that clear things up a bit for you?
Or did you realize that the largest portion of persons affected in this are among the poorest in a state which is rated to have amoungst it's residents some of the poorest in the NATION (cannery workers, or processers make little over minimum wage and work longer hours than most could immagine) and now after waiting all this time, to have someone make yet another dig about a DEAD HORSE ISSUE.... get off of it, it is not appriciated by those of us to whom this pertains, and has nothing to do with the subject at hand!
Meanwhile EXXON/MOBIL Corporation spends a larger amount on monthly advertising than the total award amount!
peoples live have been forever changed
incidentally that $15,000.00
figure is averaged from high to low, and this means that there are many that will receive substantially less than that....
Dondi, you read a bit too much into my comment. I am not thrilled with the stalling tactics of Exxon, the overly lenient Supreme Court that slashed the award, or nearly anything else about this case. Furthermore, I think that this earmark is actually a good thing, or at least, an idea with some positive qualities.
I was commenting about our Governor's outrageously hypocritical position on earmarks, which is essentially what this provision is.
That's off-topic in the first place, but get real, what politician in their right mind would call this anything other than a success? Kudos to Representative Young and Senator Murkowski.
How is this success? Instead of Exxon paying back these fishermen, now you and I are. They're essentially taking money from taxpayers to pay the bill for Exxon not paying enough.
How is that right? What did I ever do to these fishermen to deserve this?
Horay for the commercial fishermen, you get my tax money, but I'm only allowed to keep 1 halibut per day no matter how much it costs me to catch it. ITS NOT THE TAXPAYERS RESPONSIBILIY TO PAY "EXXONS" BILLS.
Dondi-- You are obviously thinking very clearly. Trying to spread your propaganda. #1 that the cannery workers are residents. #2 that this handout will ever reach their pockets. This money will end up in the fat cats bank accounts. Me thinks you are one of them.
yet no one mentions Young voted against the bail out...
Hey seven51, sorry to undermine your totally wrong assumption about me, but I am one of those cannery workers who was only earning $7.50Hr. and working from twelve-to-eighteen hours in a 24Hr.period.
(It is a thankless job that many Alaska residents dearly depend upon. and yes there are some coledge kid's working there too, but more importantly these jobs put money back into Alaskas economy wereas buying that jar of peanut butter or a prime steak you are sending 95% of that money out of state because of politics we can't even market local beef grown in Alaska, because the F.D.A. won't let it happen unless we charge more than the price of whats imported from outside).
I am at present due to many health problems that probably woulden't have occured otherwise, now in the process of fighting the Social Security Administration for a disability income....
Corey,
That's true, that detail gets left out. It was quite interesting that he voted against it, and considering all the pork for Alaska attached to it, quite impressive. His actions definitely scored him a few points in my book (which I never expected to happen).
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