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Democratic front-runner Howard Dean, who regularly slams President Bush for his ties to former Enron Chairman Ken Lay, has recently been accused of hypocrisy by the other candidates for helping Enron in Vermont.
They have seized on reports that as governor, Dean pushed aggressively for tax breaks for corporations that set up subsidiaries whose sole purpose is to provide insurance for the parent company.
One company that took advantage was Enron, creating a spinoff in 1994 called Gulf Company Ltd., which has been taken over by the state of Vermont since Enron's bankruptcy. .....
"Kenny Boy Lay," Dean sneered during an event last month in Houston, invoking Bush's nickname for Lay. "The president says he doesn't know him anymore, but he sure did know him when he was giving him all those tax breaks."
The breaks Dean often refers to are the tax cuts Bush pushed through Congress that Democrats say heavily favored wealthier individuals......
However, in 1993 Dean pushed for a tax cut of up to 60 percent on what these insurance captives paid on their premiums. Three years later, he lobbied President Clinton not to eliminate a $100 million deduction for these subsidiaries.
Today, Vermont has almost 500 such entities whose premiums are subject to a tax of 0.4 percent and who do not have to pay the state's corporate tax of up to 9.7 percent on any profits gained from investment of those premiums.
Some critics have said that these spinoffs allow companies to avoid paying corporate taxes in their home states on the profits from premium investments.