Fewer Rules, More Businesses—It’s Really as Simple as That
By: Dan Smith
New York gubernatorial candidate Larry Sharpe released a campaign video of him walking through his old neighborhood in New York City. Sharpe describes how his neighborhood has changed. Many of the small, mom-and-pop retailers have disappeared, leaving a mixture of vacancies and big corporate retailers.
While there’s nothing wrong with big chain stores, there is a big problem when mom-and-pop stores disappear. Businesses sometimes close, but why have other small entrepreneurs not found a way to come in and revitalize neighborhoods? A sense of local flavor is being lost, and we’re left with the blight of vacancies and only the big players, which can often seem sterile.
Sharpe explains why. He describes all the rules and regulations that a business must follow in order open its doors, and in order to keep them open. Only big, corporate retailers have the expertise to comply.
It used to be as easy as renting a store and hanging an “OPEN” sign on your door.
But today it’s harder . . . MUCH harder.
It’s tough enough to create a business which satisfies customers and gets them to come back again and again. The burden of countless rules and regulations make it impossible for many to stay open.
If you want to open a business in New York, you are likely to require most of the following: a New York State business license or permit, a New York State professional license, a local city business license or permit, a city inspection, place of assembly permit, a business registration, an Employer Identification Number, worker’s compensation insurance, general and commercial liability insurance, disability insurance, sales tax vendor registration, you must comply with commercial recycling law and adhere to local noise ordinances with regard to construction and noise your business may make. Your space must comply with disability laws and any landmark laws which apply seemingly everywhere in New York City. You must only hire licensed professionals; you may require union labor. Any employees you hire must be handled carefully: dozens of city, state and federal employee postings in your place of business, requirements for healthcare, overtime laws, fair labor practices and minimum wage laws.
I could go on and on . . . and on. But you get the picture.
And then there’s taxes: sales tax, sin tax, bottle collection taxes, unincorporated business taxes, employee tax withholdings, employer portions of unemployment and social security taxes, filing fees, licensing and registration fees, real estate tax, city taxes, New York state taxes and federal taxes—some due bi-weekly, monthly, quarterly and annually. Again, I could go on.
But you just wanted to open a store. How did this get so hard?
The bureaucratic mindset, that’s how. The flawed notion that more rules make us better off. It’s also the flawed notion that since businesses bring in money, it’s an easy place to go for every agency and jurisdiction to go to take a cut.
Bureaucrats know rules, they don’t know how to run a successful business. They only know how to destroy otherwise successful businesses.
And that’s what’s been happening.
Customers should decide whether a business succeeds or fails. But bureaucrats are taking over that job.
Even if you think some or all of these rules are wise, how can it be wise if ultimately small businesses just can’t comply and disappear? It seems that many of the same people who support “buy local” initiatives are the first to cheer for yet more rules and regulations and taxes and fees that are killing locally-owned businesses.
Where’s the wisdom in that?