George A. Pieler

If South Dakota wins, all of us may confront tax demands from states and localities we've never visited and have nothing to do with.

Amazon.com and Overstock.com are suing New York to keep their customers (and themselves) free of New York State sales tax. While tax collectors have shown great imagination in finding new ways to milk the Internet for new revenues, New York is one of few states trying to impose sales tax directly on online purchases.

The problems of insurance industry regulation merit the review currently underway at the Treasury Department. The review should concentrate on identifying the most critical problems these industries face as a consequence of government action (or inaction), and target a few discrete initiatives, such as regulatory competition, that should set the political process on a straight road to reducing those problems.

Natural disasters exposed serious flaws in the way we manage risk, including bread-and-butter items like homeowner's insurance. Regulatory power split between the states and Washington poses a challenge to reforming insurance regulation for the benefit of consumers and the US as global competitor.

Increasing competition among regulators is a promising idea, and one approach is an optional federal charter that would let insurers register with Washington rather than the state capitol. Another approach being tried out is for forward-looking states to contract with each other and regulate for economic efficiency and consumer welfare, not political grandstanding. These two ideas could also interact in a very productive way, and will get careful scrutiny in the months ahead.

Education tax credits can open doors for parents and children who aren’t satisfied with their government school. But they work best when they’re flexible and free from excessive government regulation. President Bush can promote education freedom through tax policy, using federal tax breaks that reinforce state innovations like scholarship tax credits and tuition write-offs.