Sunday, December 14, 2003

Howard Dean, Hypocrite

The New Republic's TNR Primary uncovers more evidence that Howard Dean isn't a man to be trusted, his claims to straight-talking be damned.

Candidate: Howard Dean
Category: Intellectual Honesty
Grade: F

Deanophiles love to spin their candidate's weaknesses into strengths--arrogance is a sign of conviction, tactlessness is straight-talk, and so forth. So I'm curious to see how they'll spin the latest Dean misstep: hypocrisy.

Turns out that while old Howard has been bashing the coziness of the Bush administration with corporate America, Vermont has quietly become the leading state for a dubious tax-break scheme known as "captive insurance"--under Dean's direction.

As reported in today's Boston Globe, captive insurance is essentially a way to shield corporate profits from state taxes. It starts when a parent company uses one of its own subsidiaries for insurance. The parent company makes premium payments to the subsidiary for the insurance policy, and Vermont takes a piece of those premiums in taxes. So far, so good. But under the Vermont law that Dean pushed, the subsidiary can then reinvest those premiums and keep the resulting profits tax-free. The captive insurance operation may even allow non-Vermont companies to dodge their home states' tax bills.

As a University of Connecticut law school professor told the Globe, "Dean apparently has no problems with tax havens as long as they are in the state of Vermont." And what an operation he's built: by introducing tax breaks and successfully scuttling a proposed Clinton-era regulation designed to stymie the scheme, Dean ensured Vermont is home to more captive insurers than the rest of the country combined. In 2001, he boasted that he wanted Vermont to "overtake Bermuda" as the number one destination for such operations.

Did we mention Enron opened an office in Montpelier to take advantage of the deal? (emphasis added)

The irony of that last sentence is delicious. Who'd have thunk it? Hypocrisy, thy name is Howard Dean!