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Carolina Journal Radio No. 732: Supreme Court refuses to hear N.C. voter ID case

Carolina Journal Radio / Donna Martinez and Mitch Kokai
The Truth Network Radio
May 29, 2017 12:00 am

Carolina Journal Radio No. 732: Supreme Court refuses to hear N.C. voter ID case

Carolina Journal Radio / Donna Martinez and Mitch Kokai

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May 29, 2017 12:00 am

The U.S. Supreme Court has refused to hear a case involving North Carolina’s 2013 election law. That decision leaves intact an Appeals Court ruling striking down the law. It also means North Carolina will not require voters to show a photo ID at the polls. Rick Henderson, Carolina Journal editor-in-chief, assesses the significance of the ruling. Some pundits and politicians worry about the American trade deficit. Donald Boudreaux, professor of economics at George Mason University, says those worries are misplaced. Boudreaux addresses common myths surrounding trade and the desirability of surpluses rather than deficits. Some state lawmakers want to make it easier for public charter schools to fund transportation for their students. The state offers no charter transportation funding now, but a proposed grant program would help schools serving students from low-income families to cover up to 65 percent of their transportation costs. You’ll hear from the proposal’s supporters. North Carolina voters could be asked to amend the state constitution to add more protection of crime victims’ rights. It’s part of a national campaign dubbed “Marsy’s Law.” Supporters in the N.C. General Assembly says the amendment would ensure that crime victims play a greater role in the judicial process. The idea cleared the N.C. House in April with a 98-17 vote. A proposed federal border-adjustment tax could boost N.C. property-casualty insurance premiums by $800 million over a decade. That’s the key finding in a new report from the John Locke Foundation and R Street Institute. Report co-author Lawrence Powell of the Alabama Center for Insurance Information and Research at the University of Alabama explains why North Carolina would be especially susceptible to higher costs associated with a tax that could raise the cost of reinsurance from companies based outside the United States.


From Cherokee to current attack and the largest city to the smallest and from the statehouse into the schoolhouse Carolina Journal radio your weekly news magazine discussing North Carolina's most of public policy events and issues welcome to Carolina Journal radiological guide during the next hour, Dr. Martinez and I will explore some major issues affecting our state. Do you worry about the American trade deficit. For some politicians and pundits. It's a big deal but will check with the expert economist who labels trade deficit fears nonsense public charter schools get no taxpayer money now for transportation, but that could change with the proposed grant program.

Learn why some lawmakers are pushing this option North Carolina houses approved a measure that could end up placing more protection for crime victims rights in the state constitution learn details about legislation dubbed Marcy's law plus chiller my North Carolina property insurance customers could be hit especially hard by a proposed federal border adjustment tax. Those topics are just ahead. First, Donna Martinez joins us with the Carolina Journal headline, the United States Supreme Court has decided not to take up North Carolina selection reform law that was a law that addressed a variety of voting procedures, most notably the requirement of a photo identification to vote at high court's decision leaves in place, the Fourth Circuit Court of Appeals ruling on this law here to explain exactly what that is and what it means for you and me is Rick Henderson is editor-in-chief of Carolina. Journal of course Carolina Journal following this story very carefully. Thank you alright so what does first of all, what does it mean for the US Supreme Court. They did not actually rule they just decided that no not like they decided they would take up appeal that had been made by the state of the Fourth Circuit's decision and Chief Justice John Roberts Rockwood here right now and we can do the reasons that were were not stated. Injustice Rob, but basically what this means is it for now.

The fourth circuit's opinion stands, which means that the election law is no longer on the books and the big provision.

There was one requiring photo ID at the polls.

There was also a provision involving us. Same-day voter registration and early voting sites, which was the big thing.

There was also an out of precinct voting provision there as well that again will stand because of Fourth Circuit. Let's be clear for our listeners then so as of today North Carolina cannot require photo identification to vote. That's right. That is great to do that with the next election rolls around whether it's municipal or statewide.

Then people who are not registered to vote can go to an early voting site and can register at the polls and then also rule about out of precinct voting is still allowed at that point, people can cast a provisional ballot that would account for the races that are good in the precinct.

I vote for, but not for the others. Let's get into the reasons why. Perhaps at some stated some unstated as to why the US Supreme Court decided not to look at the case. So many players involved in this Rick we have a new Democratic governor.

He was playing a role. We got an Atty. Gen. that's been playing a role in the general assembly. Of course you put all of these people in these factors into this big pot.

Why did the Supreme Court decide to pass. Well from what you can before you can sort of infer from the Chief Justice said wasn't exactly clear who the parties were involved in this case, other than the plaintiffs who brought the lawsuit because the time the lawsuit was filed, the person who was listed as the defendant was Pat McCrory was in the governor of North Carolina, Roy Cooper, who was of the Atty. Gen. had decided not to represent the state the case and so the governor had to hire his own counsel with the governor was defeated for reelection and Cooper became governor and Josh Stein became the Atty. Gen. They actually asked to have the case dismissed. And around that time the Gen. assembly attempted to get in and say will know know know we will represent the state of North Carolina because we were the ones who actually crafted the legislation and passed the law. The court decided not to get into this debate about who is representing North Carolina and that's why an awful lot of legal analysts think that Chief Justice Roberts is basically said were not going to decide who represents North Carolina here will pass for now does not mean Rick that really that their decision to pass has nothing to do with the merits good or bad of this law.

That's what you just as Robert said, actually said. I'm not ruling on the merits. This case is it a I think it has possibility of prevailing or not.

He said I'm not going to talk about that at all. So it was more an issue of if I were to ask the parties to file briefs who I can ask Eric if he is a yes and so there are other some people are reported in a way talk to Greg Wallace Campbell University Law school, who said that maybe the court would like to have a situation is not quite as muddy to review because there are other states that have passed voter ID regulations that are that are pending in the court right now and maybe having a cleaner set of litigants would make it more likely that the court would take up the case. Also, these other provisions not related to voter ID but muddy the waters a little bit too. I think the court is it possible then that the Gen. assembly would come back and create a brand-new law maybe with the same provisions maybe with different provisions. It's quite possible because we got some signals both from said earlier Phil Berger House Speaker two more that they're going to review this time that they may welcome forward with another wall challenge now course of the next couple something that would that would sustain of the likely veto for governor Cooper so if they try to pass the same bill again questions going to be a do they have enough votes to sustain that they make changes route would governor Cooper simply veto anything that requires a photo implication of the polls. That's right now not very much an open question because the governor has signaled that he probably would reaction to the Supreme Court's decision was Sam vociferous from both sides of the aisle.

Tell us about that.

Let's start first with the governor of governor basically said I would been vindicated.

We set all this is unconstitutional. We said that it was targeting minority voters. Low income voters that this was meant to suppress the votes of the people who are powerless in society and so he was. He was very triumphant about it as were an awful lot of left-leaning organizations and groups that had supported the lawsuit and I believe danwei M Carolina Journal's reporter also had in his story about this that the governor started fundraising governor started fundraising on this and also I believe the call, causing Carolina mushroom parties involved is also started fundraising so immediately they started trying to make some hay of this decision.

What about reaction. On the other side you mentioned a Senate leader, Phil Berger, he and other legislative leaders have been dealing with this for years now right in court right they they make the argument which I think is fairly compelling at the fourth circuit's opinion was not based so much on the law but was almost like a lengthy op-ed about what's wrong with with laws that are attempting to suppress the vote in the works of the of the Fourth Circuit and the supporters of of doing away with these voter ID requirements and so their argument all along was that this was a kick.

This was this was.

This is like an argument that you would make for your doctoral thesis or something like that or even a class paper and not a legal opinion based on the law because, as we discussed earlier that the trial court level, a district judge should Tom Schroeder issued nearly 500 pages of fact-finding, which attempted to forestall the sorts of arguments, the Fourth Circuit was going to make ghost typically elm appeal. The judges don't look at the facts that the facts are*establish they look at the law and the judge completely ignored and so this is a very contentious decision in many many ways, which makes me think the general symbol will come back with something or possibly someone else might attempt to get some revenue to get this lawsuit back before the justice Rick. For some reason election reform law and redistricting the drying of the district said been the subject of legal challenge for couple of decades here in North Carolina. Why is it we can't seem to do this seminar seems to be classed and you're laughing here you're smiling over really what the rules are about all these things, of course not been real clear about what the rules are.

That's one of the problems goes along with this is the courts have set up until very recently that if one political party wants to gerrymander for partisan reasons to make sure that Mac maximizes the number of its people get elected to office. That's okay, but you can't use race as the predominant factor now all the courts are given little bit of wiggle room here in their service it well maybe partisan gerrymandering isn't so snow such a good thing after all. So because a really bright line rules and the conflict is only known larger so we will wait and see if the Gen. assembly decides to take up election reform again and put together another bill or if they're just gonna let it be because right now in North Carolina that Fourth Circuit Court of Appeals ruling stands and that means no photo ID to vote in our state. We been talking with Rick Anderson. He is editor-in-chief of Carolina Journal statement this much more general radio to come in just a moment government plays a key role in your life affecting your paycheck the way you educate your kids the way you do business. How can you tell if government is doing a good job making the right choices. Spending tax dollars wisely. Carolina tackles those questions every day. The John Locke foundation publishes Carolina Journal in print each month and on the web each day at Carolina. you'll find exclusive investigative reports on topics. No one else is covering what else a rundown of the best new stories, editorials and opinion columns in North Carolina. John Hood's daily Journal news stories and important public and the voices of the newsmakers themselves at Carolina Journal radio and print on the air and on the web.

You can find the information you welcome back Carolina Journal radio.

I mixed coca United States as a trade deficit is that bad doesn't matter much at all were joining us to help answer that question is one of the most astute observers of the public policy arena and economics issues. Prof. Donald Boudreaux, George Mason University, thanks for joining us. So we do have this trade deficit.

A lot of people say this is terrible. We need to do something about it. Do we need to do anything about the trade know we've had a trade deficit for straight down going on almost 4 years. If you look at most of US history going back to 1607, when the English subtle Jamestown.

The vast majority of users and trade deficits trade. It was just a fancy name for foreigners investing a lot in your country. That's a bad that's good because more capital comes into America that creates jobs that expands businesses that create products that raises wages that increases the capital value of people's homes and in assets. You can toast you can tell a story in which trade deficits are a symptom of something bad but it's kind of a strained story, but in the case United States. We want to trade deficit because compared to other countries we remain an attractive investment destination property rights is still reasonably secure the still rule of law, we still largely have a market-oriented economy, a lot of dynamism. The Lord a large market. All of those factors attract capital.

People want to invest their money. So when they sell us things conform to sell us things rather than cash out all of their dollars immediately buying American exports take some of those dollars and they invest them in United States dollars come back to the US to just come back differently than they would come back if they were all for exports. And that's the difference in how they come back that leads to this artifact accounting artifact called the trade deficit but it sounds bad and and miss out on talk talk about this issue now for 20 years pretty solidly and I followed very closely. I Garrett is not an over. This is not exaggeration I would say that 90% of the news reporters. The editorial writers of news media.

Even some of the better business journals like the Wall Street Journal 90% don't know what the trade deficit is stages here trade deficit deficit sounds bad. Therefore, the trade deficit must be bad for equated with increasing debt. Sounds like the government budget deficit is nothing if not the same thing at all. So because it has bad sounding name and people keep repeating over and over again that it spells are doing more as a symptom of our bad practices that it must be that it's not bad. By and large, I think it's a good healthy song and also promotes economic health better than in health would be in the absence of the freedoms that is the voice of Donald Boudreaux, Prof. of economics at George Mason University. You mentioned that trade deficit does the term sounds bad but are there other factors also contributing to why so many people think it actually is bad. Some of the old market to look at view of the economy system or its mercantilist concept. It dates back to centuries won't be long before the Industrial Revolution. I like what Adam Smith said about the whole balance of trade doctrine trade ups as part of this whole balance of trade issue and I quote Adam Smith quote nothing, however, can be as absurd as this whole doctrine of the balance of trade" is a completely absurd doctrine is premised on the notion, which is the mercantilist notion that countries like business as businesses and country succeeds in trade, the more it exports. And the less it imports of the difference being made up by receipt of of of money is out of Smith pointed out, people can eat money. You can house themselves money money as a medium of exchange money is valuable only in so far as ordinary men and women can use that money to buy the goods and services that make their lives better off than raise their standards of living. So it's not contrary to the mercantilist notion, contrary to the trade deficit.

Fear is not a bad thing.

When Americans import it's a good thing import to the benefit we get from trading.

Unfortunately we have to pay for those imports and exports of the price we pay. This is the complete opposite of the mercantilist myth that sees export as a benefit while we get the stuff later.

Foreigners and imports as a cost we have to pay wine, and in exchange for getting always consumer electronics and cars and petroleum on clothing how terrible we are to minimize that this is the notion that the truck people have in in in is completely wrong, but in fairness to the drum people. They are just more open and consistent in their mercantilist more blatant about their embrace of this myth. Then most of the politicians you. There are exceptions when you show me a politician I'll scratch that politician. I will find mercantilist not too far beneath the surface not to get overly longish but does some people look at a particular statistical gross domestic product is one of the greatest things that you should be focusing on in terms economy and if you do focus on GDP.

One of its components is exports over imports so you would think we need to have more exports and imports.

Why is that wrong well is wrong for a couple of different reasons and it's it's hard not to get too terribly walk held out. I'll try to do it.

I don't know about all succeed. Good. Good went fishing in its national income form income equals consumption plus investment plus government spending, minus exports minus imports the consumption spending is already the dollars in consumption already counted in C and I to the extent that investors spend so just to make the accounting work just just honestly, we have to the international Council had to subtract those expenditures that that are made on imports. If you if we didn't count twice.

So if if if I buy what I think a good example. Now without getting too longish so one level is it's it's just an accounting measure that's necessary to avoid double counting of somewhat different reason.

That's complementary to that is when foreigners as I said when we were in trade deficit with that means is foreigners are investing in America and then when foreigners invest in America that increases the size of our capital stock. We have more factories we have improve worker R&D over time.

That increases the productivity of the economy which raises if it's measured properly GDP. There lots of problems with using GDP as a measure of economic welfare. Putting those I think it's okay putting those aside.

Over time, the trade deficit should result in higher GDP because it increases the productivity of the economy in general has it been true that when our economy is operating well operating as well is it can were operate operating with trade deficits and even larger trade deficits. As things get better.

Absolutely. Trade deficit means is that foreigners are especially eager, especially eager to invest in America something wrong with that. Just nothing at all but to invest in America. Foreigners need dollars and they get dollars by selling the stuff so we gain. We each American voluntarily chooses or not to buy something from a foreigner form voluntarily chooses or not Calvin to spend or to invest those monies. If all all along the way.

Each party gains from these many series of individual bilateral voluntary trades. How can it be that the overall result is negative. Well, if you have the wrong idea about trade deficits don't blame Donald Boudreaux, Prof. of economics at George Mason University. Thanks much of what you think you will have more on Carolina turtle radio just are you looking to make North Carolina more free the John Mott foundation is in here are three things you can do today to help us make it happen. First, know the facts visit John Mott data work for data analysis, interviews, and more and read Carolina to learn what government is doing with your money. Second, influence the debate invest in the John Locke foundation's work with a tax-deductible donation you can get it done in less than 90 seconds, at John and third make North Carolina more free by sharing the message of freedom. It's easy when you visit John

Click on shareable's download past messages to freedom. Dear friends, print the messages and mail them, or if your savvy computer user share the message of freedom on Facebook and Twitter know the facts influence the debate and share the message three things you can do today to help us make North Carolina more free. Get started North Carolina is changing not just day-to-day but outward to our minute to minute and 2nd to 2nd, how can you keep up with the changes, especially the ones that affect you, your family, your home, your job, make the John lock foundation and Carolina journal part of your social media diet on Facebook like the John Locke foundation like Carolina.

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Don't forget log on to today by something nice and help defend freedom. Support the John Locke foundation will connect Carolina journal radio why Michiko got some state lawmakers want to help public charter schools with additional money for bus transportation. It's an idea winning support from Marcus Brandon of Carolina. Can we have a 20 point gap between those kids that are economically challenged.

A free and reduced lunch that attend traditional public schools and those that are 10 charter school so we have known ever since we have started the practice of charter schools, transportation has always been a big issue and it is our firm belief that you can have the greatest school in the entire world. But if you cannot access them.

It means nothing. So a lot of our economically disadvantaged kids even though there are a lot of high-quality choices and choices that they would like to make, especially in terms of charters that are not able to make them for whatever reason because of transportation. We also know that the money that it's a log for transportation is not enough to cover for charters special when you have a bigger area big Grigor waste that you have to cover folks and you only have 500 to 600 kids versus 40,000 kids in a complete district publican representative John Harvester is sponsoring the charter grant proposal. The problem that we've seen over the last few years related to charter schools is low income families. In some cases can have trouble getting their students to school and the reasons are obvious. If you have a one parent household.

If you have, you know, low income family.

In some cases may not have a car may have a car that is not very reliable and are zero situation makes it more difficult for them. In many cases to carpool to get students to our school. So what were looking to do here is to provide transportation options for charter schools to make it easier for low-income families to get their students school. That's why the bill pertains to schools where at least 50% students are on free and reduced lunch program supporter, Alex quickly offered an example from his days as a charter school principal in Durham County. Remember very distinctly dad raised his hand and said in a very broken English. Do you provide transportation and my immediate answer was yes absolutely all over Durham County. He ended up enrolling his child Brian Clarus who came to us in third grade he didn't wasn't able to read and read and didn't speak English. We work with him over six years and six years later he graduated eighth grade scoring a four in his reading and math DRGs and a 5-0 days actually ran into him at the mall the other day and he is a sophomore at Riverside high school and all honors classes doing quite well on track to graduate from college, you been listening to comments supporting a bill targeting public charter school. It would set up a new grant program to help charters cover some costs of busing their kids to school, will return with more Carolina journal rate.

Are you tired of fake news.

Well you won't find it here at Carolina journal. We don't make things happen and we don't presume or assign motives. There's no simpler way to put it then that were proud to say that honest, factual, rigorous journalism is the Carolina journal way I reporting team is focused on accountability in government and policymaking.

No matter which political party is in power, and regardless of the person taken to task in the story and Carolina journal were beholden to the truth and to transparency. Unlike fake news lies, innuendo, questionable sourcing all meant to create controversy not inform the debate. So the next time you're confronted with fake news log onto Carolina or pick up the latest print edition you'll find compelling news reporting from a team that knows what it means to be real journalists committed to truth Carolina journal. You can count on us for the facts. Welcome back to Carolina journal radio why Michiko got some North Carolina lawmakers are pushing Marcy's law. It's designed to strengthen the state constitutions protections of crime victims rights. Wake County Republican representative Nelson dollar is helping to lead the campaign North Carolina in the past has done an admirable job of working toward empowering victims in our criminal justice system but as we have looked over our constitutional provisions in North Carolina's we have consulted with some leading experts in our judiciary.

We believe that there are ways to strengthen our constitutional provisions. We want to put this revised statute provides constitutional provision on the ballot in an upcoming election people of North Carolina decide why is this so important. We believe that in North Carolina we can successfully further strengthen the ability of victims to be able to fully participate in the process and to ensure that the spirit of the rights that are currently in our state constitution are actually operational as they enter unfortunately not of their own choice for our criminal justice system in the Senate wake County Republican Tamra Beringer is pushing a similar measure isn't something that only happens in movies or in the knees happens here in North Carolina to our citizens to our friends to our families to our neighbors and those friends, families and neighbors who suffer at the hands of criminals.

This law once this becomes law to be informed when the assailants are released that there out out of jail will also give them a voice and be part of the court proceeding that they've never had before and so I joined with representative dollar and all the folks here with us in improving what is a good system, victims rights, but it will be an even better one wants this law passed Republican representative Rena Turner also sees the need for Marcy's law serving as clerk of Superior Court and Ardell County in my previous life I had many occasions to work with victims who didn't understand the process were not sure what they are there role was in.

This is going to help them understand that matter, did more of a cooperative effort to gather and strengthen those laws that we arty have your listening to legislators who support a bill dubbed Marcy's law would ask North Carolina voters to amend the state constitution former state Supreme Court Justice Bob Orr explains why, why do we need to amend the Constitution. If we all already have in article 1, section 37 the rights of victims of crime and the fundamental answer in the important answer is that this proposed constitutional amendment put into the Constitution. Specific rights that are affected by the language in the current provision which says as prescribed by law without getting too far into the legal weeds.

Essentially, it talks about currently a constitutional right, then it's left up to the general statutes to define and prescribe how those are to operate. By virtue of this amendment. Victims of crime will have a distinct and defined constitutional right specifically are articulated in article 1, or declaration of rights and this will clearly strengthen and give greater clarity to the rights of victims of crime and is an important measure that I hope one, the general assembly passes and that the citizens of our state voted to approve the process of protecting victims rights isn't easy.

It is a huge challenge. There are hundreds of thousands of crimes in victims each year that our system has to deal with and I think we all were committed to making making sure that victims rights are protected.

But most importantly that they are implemented and fulfilled all across the state. Wake County district Attorney: Willoughby explain how Marcy's law would build on existing work to help victim crime victims rights report sources of society just like other victims of tragedy. This is dominated most vulnerable. We as a society have a moral obligation for victims of crime. It's important that we honor that obligation and we elevated to that commitment constitutional protection, district attorney's have been sensitive to crime victims and their audits and historical events during victims of term for four systems on days will continue to stand up for victims of crime on that's no different. Under this law. Most of the rights and protections that are provided in Marcy's law or in practice currently being provided by judges and clerks and prosecutors and law enforcement officer stood were insuring that they can be heard on both now and in the future they'll have a voice in our system that will make our system stronger police will continue to do investigations on prosecutors will make better decisions with their cases and judges will have the needed information to my more informed and better rulings.

Marcy's law is a win for everyone, except maybe the offenders what's new in Marcy's law. Most of the protections and Marcy's law are currently in our victims rights laws amendment but are not have constitutional protection because there only protective on the specs for devices but there are some new rights that all one is the right to be heard at a time when an offender is being released and it trial. Previously, that had not been the case on victims all the right for the reason be protected from the Kuester persons acting on behalf of the Kuester, directed by the accused on free from unreasonable delay to expedite some of these cases and and nail for the first time. If victim is not given the rights, they can ask the judge to make sure that the rights are afforded to him and I are given the opportunity to be heard in the thought of event all its primarily notice and an opportunity to be heard. Things are ensuring Nelson dollar delete house sponsor since the campaign has been going on for a while. The truly been on a quest for a number of years now on a national basis to look at each individual state there constitutional provisions and seeing how we can strengthen those so this effort is been underway successfully in a number of states, North Carolina is now looking at this effort. Again, we feel very strongly on a bipartisan basis and again between the two chambers.

The Senate and the house. What we seen in other states and other elections is that when the citizens of our state have the opportunity to truly strengthen and make a difference for victims. The numbers are pretty strong public support for victims of crime and wanting to make sure that their righteous victims are truly honored in the judicial system that resonates with citizens all across the state from you know all sorts of groups. Urban rural and everything in between. That's Nelson dollar is a Republican state representative from wake County. He's also the lead sponsor of Marcy's law is designed to strengthen crime victims rights in the North Carolina Constitution North Carolina journal radio and about if you love freedom we got great news to share with you now. You can find the latest news, views, and research from conservative groups all across the state. All in one place North Carolina one-stop shopping for North Carolina's freedom movement North Carolina You'll find links to John Locke foundation blogs on the days news Carolina reporting and quick takes Carolina journal radio interviews TV interviews featuring CJ reporters and Locke foundation analyst plus opinion pieces and reports on higher education.

All of that from the Pope Center for higher education policy commentary and polling data from the Cintas Institute and news and views from the North Carolina family policy Council. That's right, all of that, all in one place North Carolina that's North Carolina spelled out North Carolina Log on today. Welcome back to Carolina journal radio I'm Donna Martinez, a proposed federal border adjustment tax would cost North Carolina consumers an additional $800 million in higher property-casualty insurance premiums over the next decade. That is the bottom line.

Conclusion from a new report issued by the John Locke foundation and the Washington DC based R St., Institute.

Dr. Lawrence Powell is one of the authors of this report is the director of the Alabama Center for insurance information and research at the University of Alabama Dr. Paola, welcome to Carolina journal radio rabbinate. Let's talk first about exactly what a border adjustment tax is how would that work shareable. That's a really good question. The details of the legislation have not been released yet, so it leads us to make a few assumptions, no matter which way you make the assumption that they're all bad. It's a matter of how bad it might be.

We make some pretty conservative.

Some very conservative assumptions in our study, but the way it works is whenever you buy something from outside of the United States. There would be a tax that you would have to pay for it which in essence would mean that the expenses you have that come from outside the country would not be tax deductible that that's the way it it would manifest on any sort of companies. Income statement. This is actually proposal from the U.S. Congress not yet implemented that is being discussed right right exactly that that the idea of a border Extra nation-based cash flow protected a lot of names foreman and then read to say what it does takes away the tax deductibility of various expenses as an inducement to have people to have companies move their operations to US known as bat BAT are listed as Manson heard it referred to you that way if they follow use analysis and coverage. So now the question then is this proposal if implemented would have an impact on North Carolina and that's detailed in the report that way has been released by the Locke foundation and the R St., Institute.

Now you're an author explain to West End the way in which North Carolina would be impacted okay so the little bit of background when when we try to apply this and I do not have a preference between a border adjustment, tax or any other form of tax in terms of the overall economy that that's not my area of expertise or specialization, but when it comes to financial services. Almost every country that has any sort of similar tax exempt financial services, including insurance and reinsurance and banking from this because you don't bring any jobs on shore from taxing financial services this way because it's more the movement of capital supposed the movement of labor. That's an important distinction. The reason why that would affect North Carolina North. Donna has a large exposure to law hurricanes. Obviously several hundred miles of coastline where you can have those losses and can be so big that it's hard to if you think about the way insurance works you want to have a lot of things that could possibly happen that are not positively correlated and having one of them happened not make it more likely that another one happens.

So a good example is life insurance when one person to another person is more likely to die from independent of that and so you can you can take the average outcome of that becomes very predictable for hurricane when your average hurricane is 207 miles wide and the density of the population along the coast of the US including Carolina. If you have a lot almost everyone at the same time and so you gotta have enough money to pay everyone's full loss at the same time. That means the companies have to hold a lot of a lot of additional money.

Capital money above what they expect to pay out one way you can reduce that amount is by ensuring hurricanes, North Carolina earthquakes in California but also earthquakes in New Zealand and Japan and floods in Europe and nominees in different places. You got all these other earthquakes in Canada. All these other exposures that you can pool your risk with ember that happens in a global reinsurance market insurance is really the crux of this yet. Yes it exactly as so reinsurance is essentially insurance for insurance companies, let them get more diversification in their liabilities and their expected losses. So they don't have to hold as much capital to remain as safe as they currently are self this reinsurance. How is it then that this border adjustment tax proposal is it that would make this reinsurance much more expensive is that why it would cost North Carolina into more Property-casualty insurance will right now. More than half of the reinsurance market is not in the United States and all the sudden that would those expenses would no longer be tax deductible. So you gently add 20% of the cost of any reinsurance proceeded to London or Germany or Bermuda or Asia or anywhere else is not in the US, which is where most of this is his reinsurer to and you bring all that on shore US and now you no longer have a mechanism where you can share those risks of Japanese earthquake. New Zealand earthquake Australian Storm's UK floods. All that becomes everyone become isolated in their risk and so now we've already got an issue where the US has more catastrophe exposure than the rest of the world put together by a large margin so that we do get from pulling what these other countries around the globe completely goes away and what we show in the paper what we showed our analysis is because the reinsurance becomes more line to that that reinsurance can no longer be global because it becomes cost prohibitive and so then it moves on to the US where we can then share our risk with other countries and they can share their thoughts and those are very good things when they can happen. It keeps the price of insurance low when there is a higher risk than men folks in North Carolina who are trying to get property insurance facing higher premiums exactly that's that that's a long and short of it is that we would see that that's what were estimating is because we would have to raise additional capital in US when we apportion a percentage that to North Carolina. It comes out to be about 800 million over the next why would this even be considered. Considering this, this impact on North Carolina and presumably other states for other reasons. Well I wish you had matched that very political question and I tried not to be a political person but I'll give you what I've heard as long as I don't have to claim it is the optics of that would be really bad if your passing attack one to be highly opposed by all the retail companies are Walmart, Apple everybody that sells things to consumers. Think US might manufacture them out of the country think that this would be bad for them and so they don't like it. I'm not speaking for Mrs. Weber and then you say were going to exempt multibillion-dollar reinsurance and insurance companies and banks and then just throw in hedge funds to make it look even worse that the political optics of it. I think wouldn't play well and so the initial push back when when people are suggested we exempt financial services just like all the other countries do what they have attacked like you say that the political problem is not an economic problem. After Lawrence Powell is the director of the Alabama Center for insurance information and research at the University of Alabama thank you for listening on behalf of Mitch Cope and Donna Martinez join us again next week for another edition. Carolina journal radio Carolina journal radio is a program of the John Locke foundation to learn more about the John Locke donations support programs like Carolina journal radio send email to development John lock down or call 18661665534636 journal radio nation airline is all opinions expressed on this program nearly show foundation is any airline sponsored Carolina radio again

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