I was just thinking about this new health care bill provision that makes it mandatory for EVERYONE in business to file an I-9 for every vendor from whom they purchase more than $600.00 of stuff from in a year. And, it is a bad idea. But, for more than one reason. All I have heard anyone talk about is how it will put an undue administration stress on small businesses and drive them out of business because they can't afford to do all the paperwork and stay compliant with this law.
Well, as far as that goes it is 100% true. But, If they've discussed the entry burden raised I haven't heard about it. This provision will strengthen large businesses immeasurably by raising a HUGE entry burden to businesses. Here's how it works. Many of you know I'm in the appliance repair business, and I have already decided to simply go to using one national chain for my gas. That way I won't have to file multiple I-9s over gas. Just a couple to national suppliers. Guess who gets that money, the mom and pop stations I'm dumping? Um, NO! Walmart, there's one close to my house, and the gas is consistently cheap. So how then how is some mom and pop to get into business? They're not. Why? Because the mainstay of any business is repeat customers, and while the mom and pop may be able to attract some retail customers who fill up once a week, they will not be able to attract the business customers who buy gas everyday as I do.
So, in addition to raising an administrative burden and expense on the small business the federal government has raised an entry burden to new small businesses. This will of course have the effect of slowing employment, and tax revenue growth. And we wonder why the recession drags on?
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