Big Government proponents, including both Democrats and Republicans, often justify their proposals as essential to encourage technological innovation and economic growth. Far from improving the economy, however, unnecessary regulations and excessive taxes proposed by state, local and federal officials too often serve as obstacles to the creation of new products and services that can dramatically improve the quality of life and boost economic prosperity.
Consider these four examples taken from recent headlines:
• Food truck tax. Last October, food trucks in the District of Columbia began paying a 10 percent tax on everything they sell. This levy allegedly was needed to level the playing field between the new way of eating lunch (having it come to you) and the old way (going to a sit-down restaurant). Who pushed this tax that made food truck offerings more expensive? The restaurant owners trade association.
• Uber Car Service. Uber allows customers to reserve limousines or taxicabs from their mobile phones, which is often more convenient than grabbing a cab on the street. Naturally, the heavily regulated taxicab companies see Uber as potent competition, so in many cities they have lobbied state and local officials not merely to regulate Uber but to put it out of business. The fight is far from over, but the four-year-old Uber is spending money on lawyers that could have been invested in improved services.
• Internet sales tax. Passed in the Senate last month, critics argue that this tax is being used to hold back buyers from purchasing cheaper goods in the comfort of their own home. Proponents respond with the familiar argument about leveling the playing field, this time on behalf of Main Street businesses. But why not let customers decide whether to shop digitally or on foot? Why inject government as the arbiter of market choices via tax levies, credits or penalties for any of the competitors?
• Hybrid tax. Federal officials enthusiastically push hybrid autos like the Chevrolet Volt and Toyota Prius because they consume less gas and produce fewer emissions than traditional large sedans. But some state governments have gone in the other direction, trying to squash the hybrid car industry. States like North Carolina and Virginia propose hybrid taxes to make up for lost gas tax revenue. So one level of government spends billions promoting specialized vehicles that other levels of government see as threats to their fiscal health. Drivers, who paid more for more economical, environmentally safe vehicles, are caught in between.
In each of these cases, regardless of the announced justifications for their actions, government officials stepped in with measures that limited consumer choice, increased the costs of goods and services and added to the heavy regulatory burdens that slow economic growth and discourage market innovation and progress. Too often in such a politico-economic environment, the difference between winning and losing for everybody involved isn't making more customers happier, but retaining the most influential lobbyists and public relations experts. These considerations should pose a challenging question for recent college graduates who got their degrees but can't find a suitable job in the career field of their choosing: Would they have more opportunities from which to choose if government stopped making so many choices for them?