Vermont Is a Tax Haven

The Providence Journal reports that Vermont is one of the world’s leading tax havens for “captive” insurance companies. This is both amusing, because it is contrary to Vermont’s image as a refuge for 1960s dropouts, and illuminating, since it shows that the pressure to attract jobs and capital causes even left-leaning politicians to adopt market-oriented policy:

In a development somewhat counter to its apple-cheeked image, Vermont has become a leading tax haven for U.S. companies. As described in a recent New York Times report, the state markets itself alongside Bermuda and the Cayman Islands as the answer to certain types of tax headaches. …Vermont law has permitted the creation of insurance captives for more than 20 years. But it only began aggressively marketing them about a decade ago, presenting captives as a sound alternative to the insurance business that thrives outside U.S. borders. Today, more than 560 American companies have set up camp in Vermont, which also hosts an annual captive-insurance industry conference.