I visited Vermont for a wedding last weekend. The Green Mountain State, of course, ranked first (for the third year out of four that we’ve done it) on Heartland’s insurance report card.
A large part of Vermont’s high ranking stems from the fact that it has good, pro-consumer regulatory policies and has a very competitive market for all types of insurance. (The state is also a haven for captive insurers.) In Montpelier, where I am now, the degree of competition is on full display. The city is the smallest state capitol in the United States (population, about 7,700) and its main industry other than government is insurance. The home office of the state’s largest domestic insurer is right across the street from my hotel, there are two other insurance company home offices within walking distance from my hotel. On top of that, there are at least three insurance agencies within a block.
I’m hyper-aware of these things and I’m guessing that the street I’m on, State Street in Montpelier, may be one of the best places in the country to shop for insurance. (And there’s a good farmers market here too.)
The Heartland Institute has joined the Green Scissors Campaign along with Friends of the Earth and Taxpayers for Common Sense. The 2011 version of the Green Scissors report—which TCS and FOE have produced regularly for more than a decade—will include Heartland as a major co-sponsor.
FOE is a left-of-center group and, although TCS is rigorously non-partisan and centrist (it’s perfectly happy to take on sacred cows of both the Left and the Right) a lot of conservative groups don’t consider it “one of our own” because it hasn’t traditionally advocated for lower overall taxes. In the end, someone, somewhere will probably criticize Heartland’s participation in the effort because it involves calling for the elimination of many “tax expenditures” (targeted tax breaks.) Here, I’d like to “pre-but” this criticism in three ways.
First, for all intents and purposes, most tax expenditures should really be considered spending. I argue the case at greater length here, but most limited purpose tax breaks (although not the very biggest ones which are really marginal rate cuts in another guise) are intended to support particular groups of people or encourage specific behaviors. A variety of tax credits and deductions—ranging from ethanol production to the earned income tax credit—fall into this category. They function very much like spending economically and eliminating them has no consequence for the overwhelming majority of people. This doesn’t mean that they’re all bad but it does mean that they should be approached skeptically.
Second, defending tax expenditures as a class makes broader tax reductions nearly impossible in the current environment. The volumetric ethanol excise tax credit (a particularly wasteful one that may be on its way out) is a terrible policy and reduces revenues by only a few billion a year. Spread across the country, this is not enough for a broad tax cut. Eliminating ALL energy tax credits (a good idea) would probably allow for a real, meaningful cut in taxes somewhere else without further running up the debt.
Finally, it’s important to work with anyone who agrees with you on anything. Although I can’t find much to argue with in TCS’ agenda, much of what Friends of the Earth Advocates—bans on genetically modified crops, all-out opposition to nuclear power–is 180 degrees away from what I favor. There’s plenty of wasteful spending that the three groups won’t agree to eliminate but spending cuts are spending cuts and its important to build the broadest possible coalition for less overall government spending.
Just as the Right (even, yes, the libertarian right) ought to recognize that the government is good for some things beyond law enforcement and national defense, the left has to realize that the government is often the enemy of achieving goals like environmental conservation.
I purchased a new car this past Thursday (Lincoln MKZ—no, it’s not really an old man car) and secured new insurance coverage on the Internet at the dealership before I had even signed the paperwork to take possession of the new automobile. The next day I talked with a reporter about what happens if you purchase a car and fail to secure new insurance coverage. In practice, this is hard to do because dealers won’t let you leave the lot without coverage and I can’t imagine it’s a major problem. But I’m curious as to what happened before it was easy to buy insurance over the phone and Internet.
My insurer, which doesn’t work with independent agents, maintains only a handful of branch offices (most of those opened in the last two years), says that it only started offering telephone services in 1978 and did most business by mail and telegraph before then. And I’d suspect that most other insurers waited even longer to do these things since they have many branch offices and local agents. How did people get insurance binders before companies started doing this? Or were they just uninsured for a week or so?
Until next week,
Eli Lehrer, vice president for Washington Operations