Articles: The Senate's Anti-Dog-Eat-Dog Law

Articles: The Senate's Anti-Dog-Eat-Dog Law

May 17, 2013

The Senate's Anti-Dog-Eat-Dog Law

By Gene Schwimmer

In a perfect world, where Republicans actually exercise their principles, this essay would be called "The Democrats'Anti-Dog-Eat-Dog-Law."  Sadly -- but let us agree, surprisingly -- Republicans are complicit with Democrats in passing the travesty known as the Marketplace Fairness Act.  This Heather has two mommies.

The purported logic behind the MFA is simple: the ability, via the internet, to buy products and services across state lines without paying a state sales tax puts in-state businesses, who must collect state sales tax from their customers, at an unfair competitive disadvantage.

Nonsense.  First, where is it written that business competitors must be fair?  Open and transparent, yes.  Honest, yes.  But fair?  Business, like politics, ain't beanbag.  Indeed, one could argue, the goal of every businessman, to the great advantage of us consumers, is to be un-fair -- to gain a competitive advantage over his competitors in the only way a businessman can get such an advantage in a capitalistic system: by offering some combination of better and cheaper products and/or services.  It is by doing this that the businessman hopes to entice you and me to buy his stuff instead of his competitors'.

Second, if the logic behind the Marketplace Fairness Act truly is to "level the playing field" among competing businesses, why stop at the internet?  Wanna see some real "unfair competition"?  Then visit Midtown New York, where you will see brick-and-mortar restaurants paying stratospheric rents (I'm a commercial real estate broker in NYC, so trust me on this), plus utility bills, license fees, salaries for multiple workers, and taxes and/or benefits on all of the above.  Oh, and don't forget to include, starting in 2014, for businesses with 50 or more employees working 30 hours per week, health care premiums, or ObamaCare.  And on the same block, perhaps even right in front of these brick-and-mortar businesses?  Guys in pushcartsand food trucks, who have none of those expenses.

And yet, astonishingly, New Yorkers still eat in restaurants.  New Yorkers are still willing to pay as much as $5.75 (!) for a hot dog, even though there are pushcarts selling hot dogs for as little as $1.00.

What we have here, with the internet-to-brick-and-mortar comparison, is the same thing we have with the pushcart/food truck-to-brick-and-mortar comparison: the age-old choice between price and service and price and quality, with either choice equally likely to get the upper hand, depending on one's mood -- and wallet -- at any particular time.  If one desires a hot dog, is in a hurry, and/or has only a buck to spend, I can personally attest to no dearth of pushcart vendors who would be happy to serve you.  And if one prefers a more upscale (and indoor) hot dog experience, Daniel Boulud's Café Boulud, at the corner of Broadway and 65^th, will sell you one of their celebrity-chef hot dogs for...well, the menu doesn't list a price, which, in NYC, should tell you something.

Same with the internet.  So while, yes,  I have examined a product in a brick-and-mortar store and then gone online to see if I could get that product cheaper on the internet, there have been other times when I have, for example, stood before a line of inkjet printers at Staples and brought up Amazon.com on my BlackBerry not to look for a cheaper price online, but to read the consumer reviews of particular models to help me decide which one to buy from Staples.  In this case, then, the internet helpeda brick-and-mortar business to make a sale.

Even better, why not enjoy the advantages of both worlds as, indeed, Staples does?  Like so many modern businesses, Staples has brick-and-mortar stores and a website.  If selling over the internet is so much cheaper than selling on-site, why don't all of those businesses create their own online storefronts?  Oh, you say, your particular product or service won't work on the internet?  Then let me suggest that that product or service won't work for anyone else, either.

And for those businesses whose products or services are equally well-suited to both on-site and website sales, one would think that the ability of a local brick-and-mortar business to expand its reach beyond its small, local market to the entire country, if not the entire world, and pay no state income tax would be a good thing.  And not to have to charge a state sales tax for those sales could be a greatadvantage.  All that's needed is for a business to be willing to change its business model from circa 1913 to circa 2013.

And if a brick-and-mortar-only business is unwilling to change?  Then what we have here, I would suggest, is an Anti-Dog-Eat-Dog Law, straight out of Atlas Shrugs.  The best response I can offer to such businesses is "too bad."  This is America, not France, and in America, there is no constitutional right to continue doing the same thing, the same way, forever, as in European countries, with their quaint little shops and small, inefficient postage stamp-size farms.  Sorry to be blunt -- I know it sounds harsh, and I can certainly understand how some brick-and-mortar operators love running their brick-and-mortar businesses and not want to change a lifestyle and business model to which they have become accustomed -- just as I can understand how some candle- and buggy whip-makers may have loved what they did, too.

But I can also envision how someone who enjoys making candles and buggy whips by hand, who could not have made a living 20 years ago, could make a very good living today -- by selling over the internet.  It's certainly worked for handmade duck calls.

So let's just say that my sympathy for the brick-and-mortar store whiners owners is as wide as the Grand Canyon, but considerably less deep.  Still, that's several magnitudes' wider and deeper than my sympathy for the senators -- and, especially, the GOP senators -- who voted for the Marketplace (Anything But) Fairness Act.

So what say we chuck the red herring of "marketplace fairness" overboard, cut to the chase, and be honest, which, as a non-politician, I am free and able to do.  The Marketplace Fairness Act has nothing to do with marketplace fairness and everything to do with politicians -- of both parties -- sticking their fingers into every nook and cranny, searching for additional revenue to shovel into the voracious maw that is government today, at all levels, instead of doing what  they should be doing: cutting spending.

Let us hope that when this misconceived bill reaches the House, that House Republicans will show more sense than their colleagues in the Senate did.

Follow Gene Schwimmer on Twitter.  Visit Gene at geneschwimmer.com.