By SUZANNE DOWNING
Sept. 27, 2026 – Mary Peltola, whose last name was Kapsner while she served in the Alaska House, pushed state income taxes for Alaskans not once, but twice. She also pushed another, even broader tax that included a statewide sales tax and higher taxes on gasoline, alcohol, and cruise ship passengers.
Now, as the Democratic nominee challenging Republican US Sen. Dan Sullivan, Peltola has made lower taxes a centerpiece of her 2026 affordability campaign.
In 2002, Peltola and five other Democratic lawmakers hatched the tax plan that included a 1.5% statewide income tax expected to collect nearly $300 million from Alaskans.
The package called for a 1.5% statewide sales tax and separate increases in taxes on gasoline, alcohol and cruise ship passengers, projected to raise another $200 million.
Peltola voted twice in 2002 to advance House Bill 303, the proposed statewide income tax.
The legislation was structured so that middle-income Alaskans would have paid the highest rate. It failed to pass, but Peltola returned to the idea two years later.
In 2004, she co-sponsored House Bill 470, another statewide income-tax bill. She would require most Alaskans ti pay the state an amount equal to an additional 15% to 20% of their federal income-tax liability.
That proposal did not become law either.
Alaska has not collected an individual state income tax since 1980. Rebuilding the bureaucracy to administer one would carry a substantial price tag, according to a 2026 Department of Revenue fiscal analysis of a separate, more recent income-tax bill being pushed by Democrats.
The department estimated that an income tax would require 70 new full-time employees, including auditors, tax technicians, appeals officers, accounting staff, computer programmers, supervisors and office workers. Officials reached that estimate after consulting Montana and Vermont, two states with populations comparable to Alaska’s and income-tax staffs of approximately 102 and 60 employees, respectively.
Salaries and benefits for the 70 new state employees were estimated at nearly $8.5 million annually.
The state also projected $9.5 million in one-time costs to build income-tax and identity-verification systems. Continuing software maintenance, identity services, office leases, travel, training, equipment and other expenses would bring annual operating costs to approximately $11.8 million to $12.7 million in most years. A periodic system-upgrade year was projected to cost nearly $17.8 million.
That fiscal note was prepared for a 2026 proposa. It offers a current estimate of the government machinery Alaska would have to create to resume collecting a broad-based income tax: roughly $9.5 million upfront and about $12 million every year thereafter.
Peltola’s campaign message today is markedly different.
“Alaskans should be able to keep more of the money that they earn in their own pockets,” she wrote in her May 2026 affordability plan. “That’s why I’ll fight to cut taxes for more than half of hardworking Alaskans.”
Peltola says she would eliminate federal income taxes for working- and middle-class Alaska households earning less than $92,000 a year, with the cost covered by raising taxes on millionaires and billionaires.
Alaska has roughly 30,000 millionaire households out of about 240,000 total households in the state, or about 12.5%, according to an analysis published here.
But before campaigning as a “tax cutter” in 2026, Peltola twice put her name and her vote behind efforts to restore an Alaska income tax — first in 2002 and again in 2004. Both plans hit the middle class. Neither effort succeeded, but both remain part of the legislative record voters can compare with the affordability message she sells now.
3 thoughts on “Peltola promises tax cuts now, but pushed Alaska income taxes twice”
Nice front page coverage of Peltola in todays NYT. “Mary Peltola, the Democratic Senate candidate in Alaska, has complicated politics: She is pro-gun, pro-oil and pro-gas — but also pro-environment and especially pro-fish.” That should be worthy of 4 or 5 articles on this site shouldn’t it?
It appears, Damon, that that “news” is covered elsewhere. Are you proposing that Suzanne parrot the NYT? If you don’t like the coverage here, perhaps you should stick with the NYT, since you are more aligned with their brand of politics than Suzanne’s. Or do you just assume that everyone is entitled to your opinion?
The skwa is nothing but a village snake. Handouts for her people. The rest of us:
pony up. As instructed by her Marxist supervisors, she’s coming after your billfold.