Local Government Tyranny on Small Business

With all the hype around the federal government’s goings, local government tyranny on small business is often forgotten

November 7, 2016

By: Bobby Casey, Managing Director GWP

It amazes me how so many Americans put so much stock in the federal government of the United States. I can certainly see why other countries would be concerned with who becomes the POTUS, since they will likely be on the receiving end of their foreign policies. But domestically, it seems a rather pointless, if not obviously rigged.

I’m not a big advocate of ballot voting as a general rule, but I do understand the argument for defensive voting, especially since in this lovely democracy, people’s rights can easily make their way to the chopping block.

The modern day, economic David and Goliath story is in fact that small budding Entrepreneur versus the mighty and belligerent State. I write about it a quite a bit, but not nearly enough to account for all the fallen would-be heroes in this battle for economic freedom.

So many people complain about the Big Box corporations or the large multinationals owning everything. While I have no problem with someone making it big, I take great issue when they manipulate the playing field against their competition and crony up with the state to do it. That’s not winning. That’s cheating. It’s like buying off the referees in any professional sport.

If you recall, we did this piece about “System D: The Shadow Economy”. The intuitive thought of many when they hear about the black market is “criminality”. The truth is, it is people trying to carve out a living. The dangerous criminal element is everywhere regardless of regulations. You have people selling food and phone cards or their labor to build, clean, transport, etc.

If you think this is only true for third world countries, you’d be mistaken. The exact same is true in the United States. People are constantly selling little things here and there to make a little extra, and technology has facilitated that to a magnificent degree! Some examples include:

• Ridesharing
• Homesharing (e.g. Airbnb)
• Food sales through groups on social media
• On-demand moving services

These are all little side businesses for many people who are supplementing their incomes. But even if it was the primary means of support for themselves, all the more reason to leave it alone and allow them the means to support themselves and maintain their independence.

Yet the stories keep coming.

• A woman in Dallas, Texas is facing $700 in fines for selling homemade tamales. (Source: Reason)
• Another woman – a single mother of six – sold her ceviche to an undercover detective and faces potential jail time. (Source: Fox40 Sacramento) She wouldn’t take the plea deal for 3 years’ probation, instead she’s fighting it. But the fact that the city is willing to pay to prosecute and incarcerate her, and take her away from her kids over a non-existent crime is absurd!
• Some bed and breakfast inns in Wisconsin CAN give away their baked goods to their customers, but cannot sell them. If they sell them, they can face hefty fines and even jail time. (Source: Forbes) In some of these cases, if they lived a few miles south in the state of Illinois, they could bring in about $25,000 more in income. It’s hard to believe this has anything to do with safety considering all the things they CAN sell from their home kitchen legally: popcorn, both pasteurized and raw apple cider, maple syrup, sorghum syrup and both pasteurized and raw honey, the limited sale of home-canned goods, such as jams, pickles, salsas and sauces. So some new legislation is being introduced: “New Cookie Bills that would allow the unlicensed, face-to-face sale of not potentially hazardous home-baked goods, up to $7,500 annually, were introduced in the Senate and Assembly in October 2015. The Wisconsin Bakers Association immediately began lobbying against the bills, stating “[W]e don’t need more competition; we need cooperation from our government!” It is widely expected that Speaker Vos will again block a vote.” In case you’re wondering who “Speaker Vos” is: “Assembly Speaker Robin Vos, who owns his own commercial food business, even refused to allow the Assembly to vote on a Cookie Bill last session, despite bipartisan support.”

The stories seem endless when you start looking just at Lemonade Stand persecutions. Look anywhere on the LemonadeFreedom.com page and you will find countless children and families being prosecuted for what once was an American pastime and a sort of rite of passage into financial responsibility.

I used to think it was only when money changed hands that the state got involved until I saw a rise in the crackdown on charitable food preparation:

• 3,000 homeless people were denied food because the charity offering it didn’t have a license. (Source: Free Thought Project). The charity, Kookers Kare, out of Missouri was forced to bleach and dump the food they prepared.

The argument is that it’s not fair to all those who did pay to play. Well, then eliminate the pay to play regulations. The real unfairness here is that struggling people want to work. They want to offer something that the markets demands. They want to compete too. The defense of these regulations ensures that the market remains rigged against them.

The same kitchens used to feed themselves and their families are being used to feed others. But another $40,000 to $80,000 investment in regulations ought to do the trick right?

This keeps happening. Larger established businesses had the luxury of starting off without those barriers to entry, but now call for the government to protect them from it.

Even Airbnb is seeing a new attack on its hosts, blaming them for housing shortages and the AHLA (American Hotel & Lodging Association) is demanding the hosts pay an additional $2,500 tax.

In addition to that tax, you’d not be able to share your home while you’re out of town, and you’d be subjected to city inspections.

Airbnb had this to say:

“While $2,500 might not be a lot for big hotel corporations, that money means a lot to hosts and guests like you. Added up, the new tax means over $1.25 billion out of the pockets of regular folks who use home sharing to help cover their rent or mortgage, pay down student debt, save for a family vacation, supplement a fixed income, or to meet people from all over the world.”

It makes my blood boil to see the entrepreneurial spirit being killed off at every turn. Every time people have an idea that works it’s either heavily regulated or quelled entirely. To make matters worse, these small business folks are scapegoated for everything from public endangerment to housing shortages. Just stop it. Stop!

Small business is the backbone of any economy. Climbing up the ladder is what each person should be doing… kicking the ladder down once you get to the top, however, is absolutely NOT what anyone should be doing. If you concern yourselves with any politics, pay close attention to the local stuff near you… especially if you either own a small business or are thinking about it.

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