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Licensing Quicksand

June 8, 2011

Why is it, I wonder, do we need business licenses?  Does the city come to the rescue of those who are bilked by unethical businesses?  Not that I know of.  You still need to find a lawyer and bring your own lawsuit.  The city says that they make sure the business is real.  If you get a federal tax ID, an assumed business name at the state (for which you must also pay) and print out your business cards, does that mean you will act in good faith?  Why do we do this to ourselves?  We constantly place barriers to small business in the way of success in the name of what?  Safety?  Protection?  A business license neither protects the customer nor keeps them safe, yet I and my husband must now write a $70 check to the city in order to continue to operate “legally” when we could use that money to purchase much needed inventory or pay the outrageous utility bill.  In Kalispell, MT, they do not require either a business license or a sign permit and I have not noticed any serious sign grievances or business practices that warrant licensing.

I recently spoke to a gentleman who told the city that he would refuse to do business in the city limits if he had to pay the “fines” that he had incurred because he filed his license “late.”  They backed off.  So, we cannot even count on the city to maintain equal measure, yet we rely on them for some nebulous safety precaution and, to be honest, sense of order that someone, probably someone who doesn’t own a business, thought was necessary to maintain the illusion of security from those nasty business owners who might somehow hurt the constituency.  If I had to guess, it would likely have something to do with someone protecting their “turf” or “power base,” and has nothing whatsoever to do with protecting consumers.  Think about that next time you vote for your city council person.  Do they support ridiculous and illogical licensing schemes?  Or do they believe that the free market will regulate itself, in sometimes more severe ways, than the government is able.

It used to be that 70% of businesses were not subject to license; less than 3% remain uninhibited.  Are you a Tea Party supporter?  Support those who believe in freedom on the local level too; it makes a difference.


From → Entrepreneurship

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