As I type this rant, I am sitting here in the State Board of Equalization’s office in Ventura where I just handed them a check for $5581 in sales tax. Today is a special day, a little victory for me. You see, moments before I walked in and paid my final sales tax to the state of California, I dropped in the mail my paper work to dissolve my company and wind down. Why? Was it because I’m retiring? No. Was it because I was unable to do business for lack of sales? No, it’s slow but there are opportunities to pursue.
The answer is that I have taken the steps to close my company because I no longer wish to pay the $800 tax that every corporation or LLC must pay in this state for the privilege of existing in this state -profit or not. Atlas, has once again shrugged. I don’t work just so I can hand it over the government.
But the story gets more interesting… A few days ago, I ordered a couple of Newcastle beers at a bar and the total came to $18. Alcohol is expensive and more-so than it needs to be were we to have a truly free market.
You see, as I walked over to the register at the State Board of Equalization (what do they equalize anyway???), I noticed a sheet of paper posted on the wall. It was the public notice for an auction of a liquor license. Yep, if you want to sell alcohol in this state, you need permission from the government. What many people don’t know is that the state actually limits the number of liquor licenses it will issue. Ostensibly, it’s to prevent liquor from being sold at the local dry cleaners or while you wait at your accountant’s office. Imagine the pandemonium.
License are so limited that to buy one from someone who already has a license means you’re paying a premium. In fact, the notice on the auction flyer said the opening bid was $48,000. That bares repeating: FORTY EIGHT THOUSAND DOLLARS for permission to sell a Newcastle beer. To put that in perspective, that means before entering into battle with the local health department, negotiating with landlords, spending many tens of thousands improving a commercial space, hiring employees, or advertising, an entrepreneur must fork over the value of this home…just to sell me a beer.
Do you think my nine dollar beer includes the cost of that license? Of course it does! And for what? All because the government wants to “protect” somebody from something, somewhere. It’s a miracle there is any profit after all this poor sap has to pay out before he can open his doors and compete with other poor saps. They’re all workin’ for the government it turns out.
The simple truth is that when government grants monopolies or in this case, an oligopoly, by concentrating the right to sell a product into the hands of a few, it is obstructing the very competition our founding forefathers recognized was so essential in both a free market and society.
So whether it is my now-surrendered sales tax license or a liquor license, government is the single largest impediment to businesses today.Flavio Fiumerodo is currently an At-Large member of the CA LP Executive Committee, and is involved with the Ventura County Libertarian party.