The Difference between “Spread the Wealth” and the Alaska Oil Money Rebate

The Difference between “Spread the Wealth” and the Alaska Oil Money Rebate

After the “Joe the Plumber” incident during the election just past, I heard on several occasions from the Main Stream Media (MSM) that BHO’s “Spread the Wealth” program is no different than the Alaska Oil Rebate program presided over by Gov. Sarah Palin.

After much thought about how to explain this lucidly enough for even the new voters that just recently registered in order to vote for BHO would understand it. I think I have may determined a way to explain the difference. Here it goes..

The Baseline

Let us imagine, for the sake of argument, a housing development with 10 homes. These homes range from humble 1000 square foot Ranches to 4000 square foot ‘McMansions”. This development has some common grounds that require mowing, landscaping, and general maintenance. We will say that the annual cost of this maintenance is $3600.00. This would require that each resident or family pay $30.00 per month or $360.00 per year to cover these costs.

The Alaska Oil Rebate Example

Let us say again, for the sake of argument that a portion of the common property (“Commons”) borders on a local park. This park hosts a festival; a concessionaire approaches the community council, and offers to pay $600.00 a day, for the Saturday and Sunday on which the festival will be held. This will be an un-budgeted windfall for the community. The Community Council appropriates $200.00 of the $1200.00 to use, to pay the landscaping company to clean up and make any repairs to that portion of the “Commons” that may be damaged by the festival goers. They therefore have $1000.00 left over. The Community Council then decides to give the $1000.00 that remains, back to the property owners; they therefore get $100.00 each.

This is of course an very simplistic example, but it is basically what happens in Alaska. The Alaska Govt. leases land to the Oil companies. They then receive payment in royalties from the Oil companies. Instead of keeping that money which is not needed for state operations, they give every ‘Legal’ resident of Alaska a portion of that money.

The Share the Wealth Example

For this example we will break down the residences thus, two 4000 square foot houses (sqf), two 3000 sqf houses, two 2000 sqf houses, and four 1000 sqf houses.

A new president of the community council is elected and he determines that the current community dues program isn’t “fair” to the residents that live in the 1000 sqf houses. He further determines that the “Rich” people of
the community, those with houses over 2000 sqf should pay their “fair share”. Also, in the spirit of “fairness” he determines that a “Graduated Scale” of dues be implemented. This would ensure that those who have the largest homes would “Share” the bulk of the burden. Now for some math, under the original “unfair” plan everyone paid $30.00 each month or $360.00 a year. Under the new “fair”dues plan, the $1440.00 that was previously paid by the 1000 sqf’ers must now be paid by the “Rich” residents. This is how it is to be divided, the 2000 sqf’ers will pay an additional $108.00 each per year, or 15% of the $1440.00, the 3000 sqf’ers will now pay an additional
$252.00 each per year, or 17.5% of the $1440.00. Of course we can’t leave out those evil 4000 sqf’ers, they each will pay an additional $360.00 a year or 50% of the $1440.

This is how in breaks down under the new plan:

House Size	Dues owed pmth/pyr
4000 sqf	60.00 / 720.00
3000 sqf	51.00 / 612.00
2000 sqf	39.00 / 468.00
1000 sqf	0.00 / 0.00

As time passes, the economy hits hard times, several of the four 1000 sqf’ers can no longer either pay their mortgages or afford food. The council President, showing love and compassion for his neighbors and
friends, decides that the 1000 sqf’ers should get a ‘refund’ on their dues to help them out. They each will get $1000.00 each year from the Community Council.

This how the dues will now be paid: (amounts have been rounded up)

House Size	Dues owed pmth/pyr
4000 sqf	144.00 / 1728.00
3000 sqf	101.00 / 1212.00
2000 sqf	72.00 / 876.00
1000 sqf	+84.00/ +1008.00

Some will say that this is a bogus example because these people pay the association dues voluntarily and can refuse. That is true they could, but when you purchase a house in a development you agree to a “Covenant”. There are rules pertaining to association dues wherein the Community Council or association can sue you for non–payment of dues and place a lien against your property for the unpaid amount.

By the way, the IRS claims every year when they announce compliance percentages and the amount of receipts to the Federal Govt. That the United States of America has the largest Voluntary tax system in the world.. I bet you didn’t know it was Voluntary, did you? Try not Voluntarily paying and see what happens..