New York State vs. Small Business

In any economic evaluation, you have to balance long-term goals and short-term goals in a way that will ultimately benefit the “Bigger Picture.” In other words, though it isn’t always the case, sometimes you have to sacrifice short-term prosperity in order to benefit greater in the long run. Recent decisions by New York State, however, seem to suggest a willingness on the part of the State to not only favor the short view, but positively decimate the potential for future prosperity.

The first of these decisions, by the unelected bureaucrats of the State Dept. of Taxation and Finance, includes a new registration and fees for businesses to be able to collect sales tax for the state. You read that right. The State still requires a sales tax to be assessed at cash registers across the state — money which goes directly to the State coffers — but now, retailers have to pay for the priviledge. Par for the course, T&F offers not so much an explanation for this monstrosity of authoritarianism, as a “justification:”

Department spokesman Thomas M. Bergin said the department estimates there are 600,000 active businesses. The $50 fee therefore would generate about $30 million for the state.

“We have never gone through these filers to see who’s here and who’s not,” Mr. Bergin said. “But it also will raise revenue that the state is badly in need of.”

In addition to weeding out defunct businesses, the recertification process could help the department find businesses that owe sales taxes.

In other words, the over-paid bureaucrats at T&F are incapable of actually doing their jobs, so they are charging these businesses in order to be able to make record of retailers they have failed to keep track of. The Government hacks suck at their jobs and the people who perform a service for them (charging and sending sales taxes) have to foot the bill to cover. That Jamie Woodward, the acting commissioner of that department, still has a job, is astounding. Not particularly surprising, but troubling, nonetheless.

I should not have to explain why charging small businesses an additional fifty bucks per quarter (or cycle) is a bad idea in an already troubled economy. I try to avoid explaining common sense — I also refuse to pepper my blog with warnings not to drink Drano or stare directly into the lens of a 5,000-candle-power projector. I’m sure, if you stare at the above sentences long enough, you’ll be able to muddle through. Unless you happen to work for the state.

Alas, the state’s assault on small businesses didn’t start there, and it doesn’t end there. Not by a long shot.

Another recent development involves everyone’s favorite scapegoat, TOBACCO(!!!!!!!!!!)(cue Snidley Whiplash theme). As has been pointed out by this blog before, New York State under “governor” Paterson seems to have found itself a cash cow in the less-than-healthy lifestyles of many New Yorkers. So long as the State is careful only to go after the unpopular minorities of society (like the smokers and the fatties), they figure people won’t mind (or won’t notice) that their freedoms are being eroded.

This time around, though, the State is going after tobacco retailers (and therefore, smokers) in a more roundabout way. Rather than hitting cigs with another tax, they’re jacking the price of the tobacco license. A lot. Where it once cost retailers $100 to get a license to sell tobacco, it will now cost a minimum of $1000. That’s right. A 1000% fee increase, at a minimum. True, my memory can be short, but I can’t think of another fee increase that massive over a single year.

And who’s going to get hurt by this? Big business? Not likely. Big Tobacco? Probably not. Small business and the consumer are going to take the hit, again.

So, good ole Greg & Molly’s out on Route 11, who does a pretty good business in general, but has been suffering in the downturned economy like everyone else, now has to come up with another $1000 a year (or more) and another $50 a cycle. They can probably deal with it, and maybe even manage to come back out of it a stronger business.

Folks who haven’t been around as long, who are perhaps still struggling… well, they’re SOL. Honest folks, in general, who are just trying to make their own way. But then, it is becoming more and more clear that “making our own way” is exactly what New York State doesn’t want to see happening. And as they kill off the businesses, finances and dreams of their constituents, the elected officials of New York State will soon find that they haven’t the revenue left to keep operating. And with no more smokers, fatties, rich folk or small business owners left, who do you suppose they’ll have to shake down next?

(cross-posted at SLC Republitarian)