To resolve the controversy over insurance coverage of Superfund sites, it has been proposed that the insurance industry be taxed to create a fund out of which claims would be paid. What difference does it make if the tax is levied on the basis of:
a. Insurance premiums as of 1980?
b. Current insurance premiums? Which insurance companies might be expected to prefer each way of levying the tax? How does each form of tax affect the supply curve of insurance?