Tags: neal asbury | nanny state | economy

Overstepping Authority Kills a Nanny State's Economy

Overstepping Authority Kills a Nanny State's Economy
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By    |   Tuesday, 10 July 2018 07:13 PM

During Obama’s presidency, two big-city American mayors decided it was their job to motivate citizens to drink less soda. Then the federal government decided it was its job to urge parents to sign up for healthcare by way of schools stealthily sending messages home through your children. And federal bureaucrats found ways to change minds about which washing machine homeowners bought.

These decisions heralded the rise of the “Nanny State” — the idea that elected officials find it appropriate to treat their constituents like children, meddling in their lives in a way that goes way beyond their authority. Just when we thought the Nanny State had ended, it has once again raised its ugly head.

It’s important to understand that the whims of officials often have far reaching, and dramatic impacts on the economy.

For example, when Chicago decided to levy a penny-per-ounce tax on soda and other sugary drinks, it was repealed after two months when the city realized that it would make the soda tax subject to an additional sales tax, which is illegal in Illinois. It sent Chicagoans scurrying to the suburbs to buy soda, causing economic hardship for stores in Chicago that sold soft drinks or sugary drinks. A multimillion-dollar media battle between the soda industry and public health groups was launched and filled the airwaves.

Can you say “unintended consequences”?

Seattle decided to levy a $275 tax per full-time employee on businesses with more than $20 million in annual revenue.

Unintended consequences raised its ugly head once again. Amazon suspended two building expansion projects. These would have increased employment and generated tax revenue the city desperately needs to help solve its homeless issue which was why the tax was being implemented in the first place.

The Wall Street Journal reports that “more than 100 large businesses including Expedia, Alaska Airlines, and Redbox wrote letters warning that the tax sends the message to every business “if you create too many jobs in Seattle, you will be punished.”

Worse yet is that some 300 small businesses warned that “continuing tax increases and regulations will only hurt the small business community and will vastly change our city.”

In short, Seattle seemed oblivious to the plight of its business community through the actions of overreaching bureaucrats.

Like Chicago, Seattle came to their senses and repealed the head tax before it caused irreparable damage. However one must wonder what they will think of next.

Then there is the state of California, which leads the nation in "Nanny" laws. The California Energy Commission recently voted 5-0 to add some new provisions to the state’s building code. Among them is the requirement that as of 2020, all new houses and multifamily residences of three stories or fewer, along with all major renovations, must be built with solar panels.

This all sounds good except for the fact that rooftop solar is an extremely expensive way to reduce carbon emissions. In fact, a UC Berkeley professor sent a letter to the California energy commissioner, arguing that “residential rooftop solar is a much more expensive way to move towards renewable energy than larger solar and wind installations.” Rooftop solar generates energy anywhere from two to six times the cost of energy from big renewable energy farms. By some estimates, the increase in median mortgage payments will be $71 per month. The solar panel mandate will cost private homebuyers anywhere from $8,000 to $12,000 upfront.

Now comes word that only the original homeowner owns the solar panels, so that a new owner does not inherit the panels.

The San Diego Union-Tribune warns that if you don’t make enough money to pay federal taxes, the solar tax credit that helps you pay for the panels will not apply. “That’s exactly what happened to a retired couple living on Social Security and a modest pension in the Anaheim area who got a rude awakening after spending about $30,000 to have a solar system installed in their home. But while the total 30 percent (for the solar tax credit) was something like $9,000, the couple ended up with nothing because they didn’t owe anything to the Internal Revenue Service.”

Plastic straws used in restaurants are the latest targets of the Nanny State. Plastic straws are banned or limited for use in Malibu, California; Seattle, Washington; Davis and San Luis Obispo, California; and Miami Beach and Fort Myers, Florida.

The ban has resonated with fast-food restaurants, including McDonald’s, where the company’s board and shareholders agreed to conduct a study enumerating “business risks” associated with use of plastic straws, arguing that their continued use could cost McDonald’s environmentally aware customers.

Everyone is in favor of a cleaner, safer environment, but nobody has factored in what this might cost restaurant franchisees which will bear the brunt of the new packaging costs.

Finally, although Prohibition has long ended, it hasn’t stopped the Nanny State from getting get involved in the liquor business. Idaho, for example, restricts the number of liquor licenses, allowing just one for every 1,500 people. The government claims that the limit is meant to further temperance, which Idaho’s 1889 constitution calls an element of government’s “first concern.” In reality, the limit acts as an anticompetitive boon to the established businesses that already have a license and can keep out new competitors, as well as to the politicians who can grant exemptions through special legislation.

In Indiana, only liquor stores can sell cold beer, while groceries stores, convenience stores, and pharmacies are stuck selling beer at room temperature. There is no good justification for this measure.

Regulations are designed to help people, but some states and cities have gone overboard, interfering in commerce and personal choices. Small businesses suffer most from indiscriminate regulations. For the good of every American, the Nanny State has no place in this country.

Former President Ronald Reagan once said: “Government exists to protect us from each other. Where government has gone beyond its limits is in deciding to protect us from ourselves.”

Neal Asbury is chief executive of The Legacy Companies.

© 2020 Newsmax Finance. All rights reserved.

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Just when we thought the Nanny State had ended, it has once again raised its ugly head. It’s important to understand that the whims of officials often have far reaching, and dramatic impacts on the economy.
neal asbury, nanny state, economy
Tuesday, 10 July 2018 07:13 PM
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