Wednesday, August 12, 2020

Wichita: We Don't Need a Business License

Licensed from iStock
Wichita's mayor, Brandon Whipple, is proposing that Wichita city council enact a law requiring a business license. Wichita, the home of companies like Pizza Hut, Learjet, Coleman, Cessna, White Castle, Koch Industries, Freddys Frozen Custard, and many other national brands, has never had a requirement to have a business license. While I believe Mayor Whipple is well-intended, a business license is a terrible idea and I would like to explain why.

His reasons in favor of a mandatory business license:
  1. It is "only" $20; as he puts it, "the cost of two Big Mac meals."
  2. The city needs a database of all businesses.
  3. The money would fund a loan program for small businesses.
I have both philosophical and practical reasons to be against it. Let's begin with the above.
  1. We all know it will be $100, or more, in a few years. It is easy to raise taxes on the backs of businesspeople because there are relatively few of us.
  2. Why not begin by buying the subscriber list of The Wichita Business Journal and go from there? I don't know why the city needs a list, but if they do, there are better ways to obtain it.
  3. Why should I fund my competitors? Let the free enterprise system work. While we are in highly unusual times with COVID, generally the better companies win. We already have the Small Business Administration, various state programs, and venture capitalists. The last thing Wichita needs to do is create another city bureaucracy. 
More importantly than the above, Starting a business in America is a right! 

Is a child's lemonade stand going to have to get a license? How about a woman freelancing as a graphic designer? We should not have to get the acquiescence of government in order to start a business. America needs more entrepreneurs!

When I was young, only 5% of professions across our nation had to have a license. Now, it is 20% and rising. This sets up two types of abuse:
  • Many licenses are designed not to help the public but rather to protect incumbents. Right now, Democrats in the state of New York are pushing a bill to force someone to take 500 hours of training to be a shampooer. Really. The Another example, from Tennessee and also from the past week, is here. The sole purpose of these licenses is to limit the supply, thus forcing up wages, of people who can be barbers or "shampoo assistants." Consumers lose through higher prices and less choice. 
  • There is the likelihood of political abuse as we have seen when small business owners speak out against the lockdowns. There are so many examples, I hardly feel the need the need to list them, but if you want to see one, go here
This was published Wednesday
afternoon, after this story was posted.
There is far more of this type of
abuse of business licenses than
you may imagine.
We already tax business' sales, employment, social security, income and property. That's plenty. We don't need a business license. 

By coincidence, Reason has an article, published Monday, on this topic. 
I believe they are correct. Government has demonstrated its utter incompetence during the coronavirus outbreak and there seems to be a growing sentiment to push back. 

To my fellow Wichitans, if you agree with me, Mayor Whipple's twitter handle is: @BWhippleKS. Please let him, and our council members, know where you stand. As always, be polite. As I said, I believe he means well and he will answer your tweet. 

No comments:

Post a Comment

Note: Only a member of this blog may post a comment.