The Alaska Fair Tax is a broad-based revenue measure to help fix the fiscal gap and to preserve healthy Permanent Fund dividends far into the future. It combines the best features of sales and income taxes and, as part of an overall fiscal plan, would help protect the Permanent Fund and Budget Reserve Fund for another generation of Alaskans.

Most tax returns will be simple enough to fit on a single piece of paper and only take a minute to fill out. You'll just copy Line 33 (not for 1040EZ) from your federal tax return (adjusted gross income) and then look up the amount on the state tax table. Adjusted gross income is all income minus IRA contributions, alimony, student loan interest and a few other items. The tax would be withheld from wages.

The amount the Alaska Fair Tax would raise statewide would depend on how much is in the Constitutional Budget Reserve. If state revenues improve through higher oil prices or new development such as the natural gas pipeline and refill the Budget Reserve Fund, the Alaska Fair Tax rate would go down so the state doesn't collect any more money than is needed for essential public services and an adequate reserve.

Here's how much you would pay if the tax were set to raise $250 million a year:

*If you itemize on your federal taxes, this amount would be deductible.

The Alaska Fair Tax calculates income taxes to approximately equal the amount individuals would pay under a moderate sales tax. But, unlike a sales tax, the income tax would be deductible on the federal tax returns for many Alaskans. Unlike a sales tax, the variable rate schedule of the Alaska Fair Tax would not impose an unduly heavy burden on low-income Alaskans. And, unlike a traditional income tax, it would not penalize the success of higher-income Alaskans.