“There are rules on the books that are needlessly stifling job creation and economic growth, we will fix them.”
President Obama said this in a speech to the Chamber of Commerce this week, and even the IRS agreed with him on one particular rule in last year’s health care law. It requires all businesses that spend $600 or more with an individual or company during the year to fill out a 1099 tax form.
For businesses like coin dealers, who easily spend that much buying coins, gold, and silver from individuals, that means tens of thousands of new tax forms to fill out per year. Did you buy a new computer for your home-based business? Fill out this 1099 form, please. How many reams of paper did you buy this year? Take the time to add it up, and send Office Depot the 1099 form.
The IRS didn’t like this rule either, since they would now have to manage tens of millions of new pieces of paper. Fortunately, this rule got enough negative attention that it will likely be repealed before it takes effect.
Our state lawmakers could benefit from the president’s statement while they try to cut several billion dollars from the next budget. You know, something like, “Let’s actually encourage businesses to generate revenue so we can collect more taxes and make fewer cuts.”
After reviewing hundreds of pending bills, it’s clear to me that they’re not doing that. Instead, they’re spending their efforts at regulating even more businesses, creating new fees, and putting up more barriers for growth.
For example, House Bill 1085 attempts to bring those rogue African hair braiders in line by requiring them to complete 1,400 hours of schooling before they can get their license (at a cost of around $15,000). Except that none of the cosmetology schools in this state teach African natural hair braiding, they’re not required to anyway, and hair braiding isn’t on the state-approved examinations.
Natural hair braiding is an ancient tradition that weaves existing hair or fake hair into the person’s natural hair, in a process similar to dreadlocks. It doesn’t include any cutting, color dyes, chemicals, or alter the structure of the hair. Back in 2005, after a lawsuit was filed to force the issue, the Department of Licensing filed a policy that exempted hair braiders from having to qualify for a cosmetology license.
But in an attempt to create a separate “hair design” business license, lawmakers have pulled the hair braiders back into purview of the Department of Licensing. This bill could have the effect of closing down all of these businesses, or moving them underground. Either way, that’s lost tax revenue, and a huge barrier.
Government barriers popped up in front of me when I attempted to get an auto dealer’s license a few years ago. A good friend and I planned to start a small business, where we’d purchase cars at the wholesale auto auctions or from individuals, clean them up and offer them online. Well, we never did sell any cars after running into multiple barriers, and quickly gave up that idea.
Barrier No. 1 was the business site requirements. Our city’s municipal code prohibits the display of vehicles for sale, and we hadn’t even opened up the doors before we’d received a complaint letter from the city. Funny that they weren’t interested at all in developing a lucrative tax base (car dealers are often the top tax-producing businesses in most cities). Guess I’ll return that 60-foot inflatable car-selling gorilla I was going to put on the roof. Your loss, Maple Valley!
Barrier No. 2 included a host of licensing requirements. One-year lease, a big fat bond, someone to sit at a desk with a phone from 10-4 every day, approved signs, criminal history, fingerprinting, financial statements, and eight hours of “dealer education,” which is a complete sham of a class put on by an industry group (100 percent pass rate).
Barrier No. 3 was the Department of Licensing investigator. I don’t think I’ve ever met a meaner person in my life. I thought her parents must have been killed by a gang of car dealers, and she had dedicated herself to making their lives hell.
“If you sign on this line, and not this one, BAM! You pay. $1,000 fine. If that piece of paper is on your desk, and not in the file when I come to inspect them, BAM! You pay. $1,000 fine per violation.” We had to spend four hours with this gem, and the conversation went mostly like that, except she did a lot more swearing. She also promised to come around regularly. Oh boy, I can’t wait to see you again.
The worst part is we don’t require 1,400 hours of training to get a job that has a real impact such as a state legislator, a judge or the governor. A bad judge can permanently ruin hundreds of lives. The worst a hairdresser can do is give you a bad haircut.