The McCain campaign has hailed Palin as a fiscal conservative, and an executive who cut taxes consistently.

Rudy Guiliani:

“Then she became governor. She’s reduced taxes; she’s reduced government spending.”

Palin:

“Our opponents, they have some strange ideas about raising taxes. To them, raising taxes — and Joe Biden said it again today — raising taxes is about patriotism. To the rest of America, that’s not patriotism. Raising taxes is about killing jobs, and hurting small businesses, and making things worse.”

Chris Edwards, The Cato Institute:

“Perhaps I’m missing something, but I see no evidence that Palin offered any major tax cuts. She did propose sending $1.2 billion of state oil revenues to individuals and utility companies in the form of monthly payments to reduce energy bills, but that sounds like welfare to me, not tax cuts.”

The Anchorage Daily News reported Palin began her political career in 1992 when she ran for Wasilla city council, the same year a new sales tax was proposed:

The 28-year-old Palin was approached by several council members to help them fight off anti-tax elements, who were saying no new stores would ever come to Wasilla if it had a sales tax. A 1992 Palin ad called her a “new face, new voice,” who would work for “a safer, more progressive Wasilla.”

The Anchorage Press reported:

Palin joined then-mayor John Stein and group of boosters who said the town needed the tax to pay for a police force.

The sales tax generated $1.1 million in 1993, the first year the city collected. By 2001, when Palin was mayor and writing her last budget due to term limits, the tax had collected $5.7 million. Wasilla collected $9.6 million in sales taxes in 2007, according to financial statements on the city’s web site.

The sales tax revenue built the infrastructure that helped turn Wasilla into a commercial hub.

Wasilla’s initial sales tax was 2 percent. As mayor, Palin increased the tax from 2 to 2.5%. The Atlanta Journal-Constitution reported:

Though she established a reputation as a tax-fighter, she actually increased infrastructure spending on roads and sewers for the town, helped by the increase in sales tax revenues coming to the booming commercial hub.

CBS News reported:

Palin funded (Wasilla’s sports complex) by pushing a special referendum that raised the sales tax by 25 percent. City hall records show the referendum was passed by twenty votes.

CBS News obtained 86 pages of city council documents that show Palin sought to justify the tax increase to fund the sports complex in part because the private sector had not stepped in to fill the gap. She noted the strong support in the community as a reason to move ahead.

Despite the tax, Palin says she made life easier for businesses. The AP reported that at a campaign stop Sept. 15th in Golden Colorado, Palin said of her term as mayor:

“We became part of the fastest growing area of the state because businesses wanted to be there,” she said. “They also knew that they would have elected leaders knowing that government isn’t always the answer. In fact, too often government is the problem.”

The Boston Herald reported that, early in Palin’s mayoral career:
bq. … her timing was ideal: she was able to cut property taxes by three-fourths because sales tax revenues from the city’s new big-box stores were soaring. She even pushed for a sales tax increase to build a pet project, a new sports complex for ice hockey.

The Anchorage Daily News reported:
bq. When Palin was mayor, Wasilla’s population was steadily growing, and
she presided over steadily growing city budgets. At the same time,
though, she was able to cut property taxes. That’s because the city’s
sales tax collections grew as the area’s record-breaking growth
continued.

In 1996, before Wasilla’s property tax was cut, The Anchorage Daily News reported:

Wasilla residents pay 2 mills, or $2, for every $1,000 of assessed value on their home. That’s the equivalent of $200 a year on a $100,000 home.

And The St. Petersburg Times reported that by the time she left the Wasilla mayor’s office:
bq. The property tax rate was reduced under Palin from 2 mills to .5 mills.

As governor, Palin played a significant role in raising the oil tax in Alaska. Read more about it in our section on that. The new tax she helped create is similar to a windfall profits tax. As the price of oil per barrel rises, so does the tax rate. CQPolitics reported that:

When prices are $80 a barrel, the tax rate is roughly 37 percent, and the state’s budget runs a slight surplus. When oil hits $120 a barrel, the tax rate reaches about 50 percent of profits, and the state collects about twice what it spends.

Bloomberg:

Alaska will get $11 billion in oil taxes and royalties — $5 billion more than the $6 billion fiscal 2009 budget — if prices average $106 a barrel … The state received $5.1 billion from oil companies in fiscal 2007, when it had a $1.2 billion surplus.

The Boston Globe:

The long-term effects of sharply increased taxes on oil remain unclear, and the major oil companies in Alaska have warned that increasing taxes on their product will lead to reduced investment and production.
Alaskan oil production has been dropping steadily as older fields are depleted – down from about two billion barrels per day 20 years ago to well under 800,000 barrels per day now. Earlier this year, BP Alaska, ConocoPhillips, and ExxonMobil disclosed they were reducing 2008 spending by $400 million and postponing a $1 billion expansion project.

The oil companies pay a royalty of 12.5 percent on oil as it is extracted, plus property and corporate income taxes, but the biggest bite is a tax on net profits of between 25 and 50 percent, escalating with the market price of oil. The Alaska Oil and Gas Association, a trade group, projected that the production tax increase resulted in a one-year spike in the taxes on profits from $2.2 billion to $6.1 billion.

The Anchorage Daily News reported that Palin suspended the state’s 8 cent per gallon gas tax. In addition, Alaska residents do not pan an income tax.