( – promoted by Sue Prent)

Tom Salmon has done it again. See his latest effort on behalf of Entergy at vtdigger.

http://vtdigger.org/2012/01/31…

Here is my response.

There he goes again. First, Mr. Salmon said, “As state auditor, it is my duty to evaluate the performance of state government. I would be remiss if I didn’t point out that state government has wasted a lot of taxpayer money…”

Recent events regarding energy policy and Vermont Yankee are the result of elections and legislative action. Decisions by our elected officials are unavoidably subjective and cannot be audited like a state program. Mr. Salmon’s comments were about policy decisions. The fact that money was spent reflects choices made by our elected officials. That’s their job; not Mr. Salmon’s.

Mr. Salmon also said, “PSB Chairman Jim Volz and members David Coen and John Burke have the duty to remain objective in the face of shrill, arrogant anti-nuclear zealots who could care less about the practical issues involving energy policy.”

Wow. It’s ironic at best that Mr. Salmon – who routinely ignores the statutory limits of his own job, feels the need to lecture the members of the PSB about their responsibilities.

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This is reminiscent of Mr. Salmon’s bizarre ex-parte communication with a state judge over a year ago when he complained about “insincere” public records requests and told the judge how he should do his job (and suggested that there be “boundaries” for public records requests).

Mr. Salmon often says he is “unemotional.” Presumably, this means he is objective. So when he uses words like shrill, arrogant, and zealots, we have to wonder where he left his objectivity.

Unfortunately, this is not the first time Mr. Salmon has compromised his objectivity. In august of last year, he called for Burlington Telecom to be auctioned and made unflattering remarks about Burlington’s elected officials. At that time, his office was conducting a legislatively mandated TIF audit of Burlington. To make such remarks during an audit of the city compromised his objectivity.

A year ago Mr. Salmon said he didn’t want to be State Auditor anymore and hoped to run for U.S. Senate, Governor, or Lt. Governor. Having changed his mind, he now seeks to change the definition of his job so he can do what he wants without giving up his very well-paying job. This is not what taxpayers expect of their State Auditor (and what is he not doing while pursuing these other activities?).

This is just the latest in a series of press releases and media events by Mr. Salmon about Vermont Yankee. Perhaps he should resign and register as a lobbyist for Entergy; this press release certainly reads like it was written by Entergy.

Clearly, Mr. Salmon would prefer to be a legislator or chief executive. But he’s not. He’s the State Auditor and he should act like one.

( – promoted by odum)

While speaking on the radio recently (True North, WDEV), Tom Salmon offered his views on tax policy. He said he would like Vermont to be a “no income tax state.” Apparently he views this as a necessary remedy because “we’re a very sketchy state for businesses [and] New Hampshire continues to eat our lunch.”

The idea that Vermont’s economy is anti-business and suffers in comparison to other states is a common refrain but is not supported by the evidence. For example, for three major economic measures — rate of job creation, unemployment, and per capita GDP, Vermont has exceeded the national average over the last ten years and is virtually identical to (or better than) New Hampshire.

Like the rest of the country, Vermont still has problems. But to suggest that Vermont is an economic basket case is just plain wrong. And it is hyperbole (if not demagoguery) to suggest that New Hampshire is “eating our lunch.”

Finally, not only is Mr. Salmon’s desire for Vermont to be a no-income tax state the wrong remedy, it creates a $600 million dollar hole in the state budget. Mr. Salmon hasn’t said how he would fill that hole. Typically, having no income tax means the state must rely more heavily on regressive property taxes and fees (like New Hampshire). The result is a skewed distribution of the tax burden that benefits the wealthy.  

Mr. Salmon is certainly entitled to his opinion, but as the State Auditor, one would hope that he forms his opinions after careful analysis of the facts. To my knowledge, the Auditor’s Office has not produced any reports that provide the evidence necessary to support Mr. Salmon’s conclusions. In this case, it appears that Mr. Salmon is satisfied with unexamined assumptions and sound bites. These are not qualities we look for in a State Auditor.

( – promoted by odum)

this just out from ONE Vermont; a fascinating counterpoint to Jim Douglas’ supposed concern for the jobs at VY; I guess not all jobs are created equal…

“an independent analysis of the broad economic and employment impacts of his administration’s proposed AHS budget cuts found that:

[T]he proposed AHS cuts…are likely to result in the loss of more than 1,000 jobs per year, and could approach losses of 1,400 jobs per year.  Employment impacts from the loss of matching federal funds are estimated to total approximately 400 to 650 per year…”

the analyst is Tom Kavet, the legislature’s economist; smart guy, straight shooter

here is the link to the Exec. Summary on the JFO web site

http://www.leg.state.vt.us/jfo…

ps – Jim Douglas’ budget proposals remind me of the old Vietnam line about having to destroy the village in order to save it

No doubt you have read or heard about a recent report from Northern Economic Consulting (Dick Heaps) regarding the economic and fiscal impacts of Vermont Yankee (paid for by the IBEW local).  

The author found enormous benefits to the state from the jobs at the plant.  If all the workers lived in Vermont, that might be true.  It is my understanding, however, that 60% of them do NOT live in Vermont.  This is critical because the impacts include the wages spent by workers and their families (direct), as well as the multiplier effects from the circulation of the money in the local economy (indirect & induced).  Since so many workers live out of state, it is a certainty that they spend most of their money outside Vermont and the multiplier effects follow.

Therefore, it appears that the report’s findings about the economic and fiscal benefits of Vermont Yankee are grossly exaggerated.  

[more good questions for the candidates — promoted by NanuqFC]

The Governor (and the Chamber & friends) are advocating for the reinstatement of the 40% capital gains exclusion. Can you tell us your view of this proposal? My thoughts are shown below.

Fiscal impacts – 1:  The exclusion cost the state $51 million in foregone revenue in 2006.   How will the state make up for the loss of $50 million+ in the out years?

Fiscal Impacts – 2:  Eliminating the exclusion was part of a deal that lowered the marginal rates.  To reinstate the exclusion without raising the marginal rates allows the wealthy to have it both ways. Do you think this is fair?

Jobs:  Most of the underlying assets are invested outside Vermont and have no impact on jobs in the state.   Note: Private sector jobs grew 25% in the decade before we had the exclusion.  And even if you think states taxes matter, only four states have this type of exclusion so Vermont is at no disadvantage.

Equity:  In 2006, 51% of the benefit went to the 340 filers reporting more than $1 million in taxable income (one-tenth of one percent of all filers).  How can we justify giving so much money to so few while the state is struggling to meet its obligations (and is laying off state workers)?

Small Business:  Some argue that capital gains taxes are unfair because the filers are being taxed on the inflation adjusted value of the asset.  Here is what the CBO said about this:

“Because of inflation, the difference between the sale price of an asset and its basis overstates the income that the asset holder earns; taxes are thus imposed on phantom income created by inflation… At the same time, gains are treated favorably by not being taxed when earned but when realized, which is often many years later. Because money today is worth more than the same amount of money in the future, deferring payment of capital gains taxes is a powerful advantage and can overwhelm the disadvantageous effects of inflation, especially for assets that are held a long time. Finally, realizations of long-term capital gains…are taxed at rates lower than those imposed on regular income. The result is that even after inflation is taken into account, capital gains are generally taxed at effectively lower rates than are most other forms of income.”  (Emphasis added)

Migration:  Assertions about people leaving are speculative and unsubstantiated.  In addition, if the exclusion is so important, where is the evidence that wealthy people moved to Vermont after the exclusion was adopted?  

( – promoted by Sue Prent)

The Governor is asking the Emergency Board to raise the annual cap on business tax “incentives” from $10 million to $25 million.  The E Board consists of five people: the governor and the four chairpersons of the money committees (Heath, Obuchowski, Bartlett, and Cummings).  The proposal is bad on substance AND process.  The meeting is scheduled for this Wednesday (13th).  I sent the following memo this morning in the hope that these folks will not give Jim Douglas the $15 million he is willing to spend so cavalierly at the same time he cuts state jobs and programs.

Note: VEPC is the VT Economic Progress Council; VEGI is the VT Economic Growth Incentive program; and EATI was the Economic Advancement Tax Incentive program. “Challenges for Change” is the report (just issued) that calls for deep cuts that will (magically) produce better results.  It was heralded by the Governor and the Leg. leadership.

“I understand that the Emergency Board has been asked by the Governor to raise the annual cap for VEPC / VEGI from $10 million to $25 million.  I urge you strongly not to do so without further analysis and deliberation.

The Economic Development section of “Challenges for Change” calls for the creation of a data driven strategy before deciding how to allocate resources.  In this case, there appears to be an assumption that VEGI is a cost-effective program.  In fact, three State Auditors, the Joint Fiscal Office, and others have raised very serious questions about the efficacy of the old EATI and now VEGI (which are very similar in many ways).

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•  The Auditor has found that the background growth rate methodology is deeply flawed.  In my opinion, it has probably cost the state millions for jobs that would have been created without the “incentives”.  The Joint Fiscal Committee asked the House Commerce Committee to look into this further.  It seems imprudent to act before the issue is resolved.

•  The “but for” test, upon which the entire program’s purported fiscal benefits are predicated, is not auditable and is suspect.  For example, in the midst of this deep recession, it seems unlikely that a business would expand significantly unless there were sound business reasons to do so.  Thus, the businesses applying for VEGI “incentives” right now are probably those that are lucky enough to be largely unharmed by the recession or those that have shed jobs and now expect to rehire.  If so, the “incentives” are not needed.

•  VEPC has argued that there is no cost to these “incentives” because the “but for” ensures that they are always net positive.  This is demonstrably false even if we set aside the legitimate questions noted above.  For example, it is well known that many recipients of EATI and VEGI “incentives” have cut jobs during this recession.  That’s not surprising but it raises serious questions.  

First, it illustrates how such “incentives” are not long-term investments because the business cycle can overwhelm the purported benefits (see my earlier memos on the ill-fated Financial Services tax program for a good example of this).  [And note that VEPC has never conducted the relatively simple analysis necessary to inform the legislature about this.  Thankfully, Chairman Kitzmiller has expressed interest in this issue.]  

Second, the same companies can return after the recession to obtain “incentives” to recreate the same jobs (if so, we pay twice for one job).  The Boston Federal Reserve Bank recently completed a study of regional business tax incentive programs, including VEGI, and concluded that they virtually all represent a net fiscal cost to the states.

•  The repeated claims about the risk of businesses leaving the state are not supported by the evidence.  Notwithstanding occasional headlines, net job impacts from domestic relocation are negligible here and in other states.  [Note that the Peace & Justice Center will soon publish a new Job Gap Study report that I am preparing with extensive data on this subject.]  

Everyone wants to help create good jobs for Vermont.  But there is simply no objective data to support the assertion that VEGI is what it’s cracked up to be.  If you take seriously the call for a data driven strategy, it is essential to answer the important outstanding questions about this program.  In the meantime, VEPC should slow down and use the available resources carefully – as all other agencies and departments have been asked to do.  

Finally, I understand that the Emergency Board has the statutory authority to approve this request.  But in my view this is not an “emergency”.  Therefore, a decision of this magnitude should be referred to the committees of jurisdiction and debated by your colleagues.”

(Very well said – promoted by JulieWaters)

I originally intended to send this directly (and privately) to Deb Markowitz but have decided instead to do so through GMD because I think the subject warrants discussion.

Deb

In your Nov. 18 Free Press op-ed, you said “As governor I will work tirelessly to bring good jobs to Vermont.” (emphasis added)

To some extent, this is standard campaign speak that merits no special comment.  However, it is a phrase with a literal meaning that has found its way into common parlance through repeated use by (almost) all candidates and elected officials.  

It is used to justify certain policies that are ineffective and wasteful.  And as a result, it diverts attention and resources from more sensible approaches to economic development.

The notion that the state can “bring good jobs to Vermont” is predicated on the assumption that a significant number of businesses are moving from state to state based on favorable tax treatment (among other things).  Unfortunately, this received wisdom is not supported by the evidence.  Indeed, the number of net jobs gained or lost from interstate moves is negligible as a percentage of all jobs created or destroyed.  

Suggesting (even indirectly) that VT should use tax policy to encourage more businesses to locate here reflects and feeds the Trickle Down mantra we’ve been fed for a quarter century.  Advocates of this failed approach have succeeded in poisoning the discourse about economic development because no elected official wants to be branded as anti-business.  

But one can be pro-jobs without buying into this calculated and misleading tripe.  

So while I’m projecting a bit because I don’t know exactly how you meant it, I hope that you will not reinforce the idea that jobs are to be purchased with tax breaks and incentives.  Voters need to be told the truth and those who perpetuate such myths for their own self-interest need to be exposed.  

In my view, the campaign for governor is an opportunity to break with the past and speak honestly with Vermonters.  I hope you (and the other Dem candidates) will do just that.

( – promoted by odum)

cross-posted on the Progressive Blog

Below is a memo I sent to the Joint Fiscal Committee. It deals with the VEPC / VEGI background growth rate issue I blogged about on Aug. 13 (VEPC and the Money-Go-Round).  

The issue is on the JFC’s agenda for tomorrow’s meeting.  This is an opportunity for the committee (including two gubernatorial candidates) to finally stand up to VEPC and stop wasting the taxpayers’ money.  At a time when the administration (often with the approval of the Leg.) is cutting programs and jobs, it is outrageous that this charade continues.  Short of killing the program (only the full Leg. can do that), this is a way to make VEPC more accountable and efficient.  I hope readers will communicate with the members and ask them to do the right thing.

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To: Representative Michael Obuchowski, Chairman Joint Fiscal Committee

Date: 9 November 2009

Re: Comments on VEPC’s pre-filed testimony re. the VEGI background growth rate methodology

Cc: Joint Fiscal Committee

The Auditor’s findings highlight a serious flaw in the program that needs to be remedied.  As the principal author of the first review of VEPC, I first noted this problem nine years ago.  I am grateful that the committee is taking the time to reconsider the issue.

VEPC claims that changing the methodology will introduce a “bias” into the cost-benefit analysis.  Interesting choice of words.  The bias would be toward reducing waste in the program because the current method subsidizes job creation that would have occurred without the incentives.  

VEPC stated, “Such biases would ultimately and unintentionally discourage job creation from small and recently embarked business endeavors”.  There is absolutely no evidence to support this claim.  Presumably, the remedy would not affect applicants with little or no history in Vermont.  In such cases, VEPC could use the industry growth rate just as it does now.  

VEPC argued that “The current practice of sector-based, long-term…hurdle rates for background growth is an economically sound process that has worked well”.  It may have worked well for companies that received unwarranted subsidies, but not for taxpayers.  Applying a 2% industry-wide background growth rate to a firm that has grown at a rate of 6% makes no sense whatsoever.  

VEPC praised the so-called “standardized approach” that creates a “level playing field”.  But why should the “playing field” be level if it results in waste?  Many applicants come to VEPC with a history.  To ignore that in the name of uniformity is to ignore the intent of the program — pay only for incremental new jobs.  VEPC’s reliance on the “uniformity” card is nothing more than misdirection.

VEPC noted that changing the methodology would require increased due diligence.  At what point can we say there is enough waste in the program to justify more due diligence?  Over time, the cost to the treasury may have been millions of dollars.  To me, that seems like sufficient justification.

As the legislature looks for efficiencies in state government, no program should be off limits.  I am aware that crafting a solution will not be easy; it’s complicated.  At the very least, I hope the JFC will convene the technical advisory group to dig in and come back with recommendations.  

Members of the Joint Fiscal Committee

Representative Michael Obuchowski, Chair

Senator Ann Cummings, Vice Chair

Senator Diane Snelling, Clerk

Representative Janet Ancel

Senator Susan Bartlett

Representative Martha Heath

Representative Richard W. Hube

Representative Mark Larson

Senator Peter Shumlin

Senator Richard Sears

( – promoted by odum)

here is my testimony submitted to the Blue Ribbon Tax Structure Commission last week; it was in response to the pre-filed testimony of the Chamber & GBIC

I see that the Lake Champlain Regional Chamber of Commerce and GBIC have  submitted “Recommendations for Government Sustainability and Effectiveness”.  This document presents statements of fact as if they are self-evident rather than the result of analysis. In addition, the LCRCC / GBIC also offered “The Facts on Vermont’s Business and Tax Climate”.  This document contains references to various rankings that are demonstrably misleading.  

I offer the following comments.

First, according to the LCRCC / GBIC, the “Facts on Vermont’s Business and Tax Climate” was “based upon an internet search of various studies and reports”.  Unfortunately, it appears the LCRCC / GBIC search was limited to what they wanted to find.  The supposed “facts” presented are a litany of misrepresentations from (mostly) biased organizations and are derived from flawed methodologies.  Business climate rankings have become a small industry.  But advocacy is not necessarily scholarship.  

Indeed, there is an excellent report that examines several of the most frequently cited rankings: GRADING PLACES: What Do the Business Climate Rankings Really Tell Us?  Peter Fisher, EPI at  After reviewing the Tax Foundation’s Small Business Tax Climate Index, the author states

“There is no point, really, in trying to assess whether the SBTCI successfully predicts which states will do better in attracting business investment, creating jobs, or the like.  If it does, it is purely by accident, for the index does not even measure the effect of a state’s tax system on a firm’s cost of doing business.  Even if the index appeared to be correlated with growth, one could not conclude, as the Tax Foundation would like us to, that lower taxes cause growth.  The index does not measure tax rates to begin with, or even correlate with relative business tax levels. As a tool for assessing public policy, it is fatally flawed, notwithstanding its carefully groomed appearance of plausibility and academic credentials (however spurious). [Grading Places, p.27 – 28; emphasis added]

more after the jump

I sincerely hope you will review Grading Places because (to my knowledge) it is the only serious effort to get below the surface of the rankings reports.  The frequency of the rankings’ appearance in popular media is not a measure of their value to policy makers.  Important issues must not be decided based on anecdotes or unexamined assumptions.  We can do better.

Second, as noted, the LCRCC / GBIC Recommendations include a number of items that are assertions masquerading as received wisdom.  For example

“We believe we have gone beyond our taxing capacity….” [Recommendations, p.3]

How is our “tax capacity” defined?  For the personal income tax, the effective tax rate for those who earn more than $500,000 was 5.4% in 2007, down from 5.9% in 2003.  The number of filers reporting more than $500,000 in income doubled from 2003 to 2007 and their income tripled.  This trend reflects a continuing concentration of income at the top.  As reported by the CBPP (using IRS data), “Two-thirds of the nation’s total income gains from 2002 to 2007 flowed to the top 1 percent of U.S. households, and that top 1 percent held a larger share of income in 2007 than at any time since 1928”. (http://www.cbpp.org/cms/index.cfm?fa=view&id=2908)

A little historical perspective is needed.  During the Post-War decades, the effective rates for the top earners were double what they are today yet the economy grew enormously.  And unlike today’s extreme income inequality, all income quintiles benefitted (a “rising tide lifts all boats” actually meant something).  So exactly what is out tax capacity?

“One standard or benchmark for government compensation (pay and benefits) going forward should be to put the public sector on par with, but not better than, the private sector. A recent study of average compensation costs of state employees versus private sector employees by David Coates found that the average base salary and benefit package is $66,000 for state employees and $44,000 for private employees.” [Recommendations, p.3]

This recommendation is disingenuous at best.  How does the make-up of the private sector workforce compare to state employees?  Mr. Coates’ average is for the state’s entire workforce, which is not an appropriate comparison for state employees.  For example, the Dept. of Labor reports that there were 40,000 Vermonters working in retail in 2008 (avg. wage $25,260); 18,000 working in Food Services (avg. wage $14,917); and 11,000 working in accommodations (avg. wage $22,044).  And most do not receive health care benefits.  It is absurd to suggest state workers’ compensation should be compared to workers in these industries.

If this recommendation were adopted, thousands of state workers could see their compensation reduced by a third.  How much state tax revenue would be lost as a result?  How many workers (and their families) would become eligible for Medicaid, Dr. Dynasaur, and other public assistance programs?  At what cost?  

“Any increases to the State budget going forward must be based on a financial model of sustainable spending. Increases should not exceed the annual percentage rate increase in the gross state product or the Consumer Price Index, whichever is less.” [Recommendations, p.3]

This too is disingenuous.  In the last five years, the CPI-U has increased by 13.9% (Aug. to Aug.).  During that same period, the BEA implicit price deflator for state government was 24.7% (3rdQ to 3rdQ; BEA).  The CPI market basket includes many goods and services not purchased by state government.  This is not apples-to-apples and using the CPI is not an appropriate standard for state government purchases or operations.  

State GSP grew by 19.7% from 2003 to 2007 (before the recession).  During that same period, total instate AGI grew by 35.6%.  Moreover, AGI for those earning over $500,000 increased by almost 200% during the same period.  So why should state government be limited to growth in CPI or GSP?

“We must collect more tax revenue for the State by lowering tax rates and encouraging more people to become income tax paying residents of our State and by encouraging more businesses to stay and new ones to relocate.” [Recommendations, p.5]

No evidence was provided to support the view that lowering tax rates has a significant effect on residential migration or has an appreciable effect on business location.  Indeed, there is considerable evidence to the contrary (see Phase 9 of the Job Gap Study, p.11 at   http://www.vtlivablewage.org/P… citing the New England Economic Review).

Note: I encourage the Commission to review a recent report from the Woodrow Wilson School at Princeton on “Trends in New Jersey Migration: Housing, Employment, and Taxation”.  See http://www.princeton.edu/prior…

“Our tax policy must encourage entrepreneurial activity, create good jobs, and change the reality and perception of Vermont as a high tax state. (Set a goal of getting to a ranking of 25th nationally in the next 10 years.)” [Recommendations, p.5]

Volume 2 of the JFO Tax Study demonstrated clearly that Vermont is already in the middle of the pack.  References to per capita rankings are misleading and a disservice to this process.  Furthermore, it is ironic that any perception “of Vermont as a high tax state” has been fostered by groups like the LCRCC/GBIC, who now complain that their efforts may have succeeded.

“We must work to broaden our tax base and create more equity as to who pays income taxes. We cannot continue to have a tax structure that reduces the state’s economic activity and penalizes wealthier Vermonters. The target should be tax rates for each income cohort which matches the average of other states with income taxes.” [Recommendations, p.5]

This recommendation seeks to eliminate Vermont’s progressive tax structure.  To suggest that wealthy Vermonters are “penalized” by a system that results in an avg. effective rate of 5.4% is absurd.  Moreover, there is no supporting evidence for the assertion that our tax structure “reduces the state’s economic activity”.  This is a shibboleth.  Finally, rather than penalizing the wealthy, there is evidence that moderate-income Vermonters pay a higher percentage of their income in total state taxes than high-income Vermonters.  See ITEP’s report “Who Pays? A Distributional Analysis of the Tax Systems in All 50 States” at

http://www.itepnet.org/wp2000/…

“The recent changes by the Legislature in capital gains exemptions, depreciation, the estate tax and deductibility of state taxes enacted during the last few years should be repealed. These changes do not raise a lot of money, but they do make Vermont stand out as a less competitive place to live or conduct business.” [Recommendations, p.5]

The 40% capital gains exclusion cost the state at least $160 million in foregone revenue (State Tax Expenditure Reports at http://www.state.vt.us/tax/exp…  It is outrageous for the LCRCC / GBIC to state that this is not a lot of money.  And the suggestion that the exclusion has made Vermont “less competitive” is without supporting evidence.  

“Vermont must create and implement a long term strategic plan for economic development, within the next 18 months. Stewardship of the strategic plan must be the non partisan responsibility of the Agency of Commerce and Community Development, acting in the role of convener for the various arms of economic development in the private, public and educational sectors. The plan must be focused on clear, measurable objectives with indicators of progress.” [Recommendations, p.5]

This is a shocking admission that the state does not currently have a coherent economic development plan.  Moreover, it is especially curious because the LCRCC / GBIC have been major participants in previous long-range planning efforts undertaken by VEPC (which had statutory authority for this work before it was removed).  And while I do not agree that the ACCD is a “non-partisan” actor, non-partisan is not necessarily the same as objective.

As for the need for “clear, measurable objectives with indicators of progress”, see Phase 9 of the Job Gap Study, which exposed the failure of the state in this regard.  Furthermore, see the Unified Economic Development Budget which, for the third year in a row, noted “a lack of clear and measurable goals for each initiative / program.” 2009 UEDB, p.2 at.  To my knowledge, the LRCC / GBIC never offered testimony in the legislature on the UEDB.  

a nice piece by Terry Allen

In These Times

http://www.inthesetimes.com/ar…

Here’s what corporations know, but don’t want you to find out: Private insurance is for suckers.

Armies of healthcare industry flacks, lobbyists and bought-and-paid-for legislators rant that nonprofit, public insurance is a slippery slope to socialist hell, will limit your choice of physicians to Doc Watson and Dr. Kevorkian, and bankrupt the country. But, in fact, most U.S. Fortune 500 companies wouldn’t touch private insurance with a 10-foot colonoscope.

When they need to insure their financial health against fire, terrorism, and liability lawsuits sparked by defective products and polluting factories that kill people, they don’t call State Farm. Instead, corporations routinely insure themselves by creating a “captive” insurance company as a wholly-owned subsidiary. “The parent company is insuring its own risk,” says Sandy Bigglestone, of Vermont’s Captive Insurance division.

But when we the people need health insurance against the high cost of staying alive, we, or our employers, pay private insurers-corporations that are more devoted to protecting their profits than our health. The premiums we pay go not only for our pills and treatments, but also for lobbyists (on whom the health insurance industry currently spends $1.4 million per day for the U.S. Congress alone), campaign contributions, stratospheric executive salaries, private jets, lawyers hired to fight legitimate claims, and, of course, profits.

Click here for the complete article.