How the government terrorizes small business owners

[Sundaymorning]

A foolproofed way to destroy small business owners and discourage anyone to start their own company.

http://www.huffingtonpost.com/entry/irs-structuring-civil-asset-forfeiture_us_573b908de4b0aee7b8e83ae3?utm_content=34877830&utm_medium=social&utm_source=facebook

http://ij.org/report/seize-first-question-later/

The Institute for Justice is a non-profit libertarian law firm which helps people out in such cases. They also represented Vera Coking when Donald Trump, with the help of his government buddies who condemned her house by the power of eminent domain, wanted to build a limousine parking lot on her property. http://ij.org/case/casino-reinvestment-development-authority-v-coking/

And then people wonder why there are only huge companies and their monopolies left, and scream for more government.

[Julifornia]

I love how they'll do this to a convenience store owner, for example, for making "too many small (below $10K) cash deposits" but turn a blind eye to HSBC and Wells Fargo and whoever else blantantly laundering billions of dollars of drug cartel money.

[louisa05]

So this happens to a legitimate business, but my idiot sister-in-law continues to get away with not paying employees or not paying minimum wage, managed to fly under the radar and not pay sales taxes for four years, writes business checks to people for gifts (graduations, weddings, etc...) and claims they are payments for services, evades health department rules (she is currently selling meals made in someone's kitchen with no health certifications or permits whatsoever--they are advertised as being "prepared in an undisclosed location"), employed a woman who was doing manicures and pedicures without a license, advertises herself as a counselor with no license or credentials and as a physical therapist with no license or credentials, illegally lives upstairs in her building in violation of zoning laws, violates multiple fire codes...I could keep going. And she was only caught for the sales tax. 

And if you think all small business owners are entrepreneurial living saints...I give you the above. 

[Sundaymorning]

2 hours ago, louisa05 said:

And if you think all small business owners are entrepreneurial living saints...I give you the above. 

I don't think that. But fact is that a small business owner simply is in great disadvantage to a big company when it comes to all kinds of bureaucratic, tax and legal things. They simply can't spend so much time to fill out forms and what not than big businesses which usually have separate departments where professionals deal with all the legal/tax/etc. stuff. So you shouldn't be surprised when big corporations overtake the economy and nobody wants to open a business anymore.

Like the example of this bakery: if this would have happend to a big company, the IRS agents would have had to deal with a whole legal department, while these small business owners didn't even know what had hit them and now they have to rely on the kindness of this libertarian organization which provides them with legal service.

And your example of your sister-in-law just highlights what I always say: many laws are useless, since they pester the business owners which have integrity with lots of bureaucracy, but those who don't want to play by the rules break them anyways. A much better system would be private organizations where those businesses, which meet a certain standard and get audited, can be a member, and the costumers can look up their membership and can make sure that the business they want to go to isn't some kind of sham. Where I live, this works very well for professions which aren't "protected" by the law as in everyone can claim that they are a professional in this area (like a counsellor).

[louisa05]

And how is a private organization going to adequately monitor any of that? That would turn corrupt in about 15 minutes, probably worse than the legal system. 

My sister-in-law takes advantage of the notion of many people, both on the left and right, that small business owners are the salt of the earth and the saints of America. It is the basis of all of her marketing. But she is not abiding by local laws, treating her employees fairly or contributing to her community at all. 

[Julifornia]

You can always turn your SIL into the IRS or state Labor Board for non-compliance, or any other health department or whatnot... whether they follow up on it is another matter.  My FIL did a bunch of shady stuff with his business accounting, but he's been dead for 5 years and is obviously untouchable.

 

The problem though that for small business owners is that the regulatory burden is incredible, if you want to do things correctly.  When I had my second child, I wanted to hire a part-time nanny.  I wanted to do it legally, and not "under-the-table."  The regulatory burden was absolutely ridiculous.  I had to do the employment verification and W4, I had to get a federal EIN, a state EIN, I had to structure her pay such that I mailed in quarterly state unemployment taxes, I had to contact the state once I'd hired her and then again after we parted ways (it was amiable; I only hired her for 7 months and made that clear at the outset).  There were a couple other things that I had to do that involved reporting to state agencies but I forget the details.  Luckily, I wasn't required to purchase workers comp coverage for the state we were living in at the time.  At the end of the year, I had to give her a W-2 and remit the household employee taxes with my 1040.  And this was for a nanny whom I hired for 10-15 hours a week for seven months.  She produced nothing, required no special accommodations, didn't get any sort of employer-provided benefits, and probably could have considered herself a small business except that IRS statute does not permit household employees to be treated in any capacity other than household employees.  Dealing with that has given me serious pause when considering whether to start a business with employees (other than my own minor children).  It's a huge hassle, not even considering the risk that some bureaucrat on a power trip could come and crap in your punchbowl just for fun. 

 

Have you ever read anything by Joel Salatin?  He writes about the food industry and the way that small farm producers are held to the same standards as huge producers without taking scale into account at all.  It's all very chilling.

[Sundaymorning]

3 hours ago, louisa05 said:

And how is a private organization going to adequately monitor any of that? That would turn corrupt in about 15 minutes, probably worse than the legal system. 

My sister-in-law takes advantage of the notion of many people, both on the left and right, that small business owners are the salt of the earth and the saints of America. It is the basis of all of her marketing. But she is not abiding by local laws, treating her employees fairly or contributing to her community at all. 

Private organizations work just fine, they are certainly not worse than governmental controls. But of course, you need some other measures too. Like a good legal system where you can sue for fraud or breach of contract (which would occur if the business owner didn't provide the service in the quality they promised), and full liability of fallible business owners.

And then, independent organizations, which control each other, are also key. Here we have a few costumer- and nature protection organizations (like greenpeace or the wwf), and they are doing a great job in publicly calling those out whose products for example aren't what they promise or contain potentially harmful chemicals or germs. The worst nightmare of a business is not the government, but appearing in the costumer service magazine and getting scolded for a bad product. But they also help the businesses: some are actually writing on their products that they got a good rating from a renowned organization. In fact, the government often doesn't do anything; I know several cases of horrible physicians, where only the insistent research of a consumer organization stopped them from practising. I actually trust those organizations more than the governmental controls, which are so easy to cheat, and nowdays, the internet makes it very easy to gather information.

And of course, whether you have a governmental, a private, or a mixed system of quality control, you won't always be able to stop bad things from happening. Just recently, a woman died and two people got sick because they consumed some cheese of a German factory, where, despite of governmental regulations and, theoretically, controls, the cheese was contaminated with listeria.

Regarding your sister-in-law: somebody should turn her in. Yes, it is a problem if people aren't cautious and just assume that small business owners are inheredently good and there will always people who will abuse such naive trust. But generally I think if you know them, you can hold them better accountable than a big business, since their one small business really depends on their local reputation, and they know that. The business owners I know (and I know a lot of them since I'm an active member of an organization for small businesses) work really hard to ensure the best quality possible.

[Julifornia]

Civil forfeiture!  "Oh sure, if you're innocent, we'll give the money back.  Maybe.  In the meantime, it's ours."

http://www.news9.com/story/32168555/ohp-uses-new-device-to-seize-money-used-during-the-commission-of-a-crime

This type of thing happens A LOT.

https://photographyisnotacrime.com/2015/08/feds-who-stole-167000-in-civil-forfeiture-cash-from-innocent-mans-motor-home-fighting-to-keep-it-despite-judges-order/

http://www.copblock.org/122541/police-seize-mans-life-savings-because-shopping-bag/

And now they'll zero out your gift card and ATM card balances on the pretext of saving you from "identity theft." 

[bashfulpixie]

I've read about civil forfeiture.  It makes  me so angry.  Carrying cash is not a crime! 

[Mama Mia]

A version of this happens with smaller non-profits as well. Yes, you need regulations. Yes, you need accountability. But over the years the regulations and reporting requirements have crept up to be an enormous proportion of time and effort. Taking away from actual services. So you get the typical situation where large charities/non-profits are able to employ large staff just for reporting and compliance - and smaller non-profits just can't. Even though the smaller ones are more likely to actually be able to respond to specific community need.