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Airbnb to Collect Taxes from Los Angeles Users

in Economic Liberty, Liberator Online, News You Can Use, Personal Liberty, Property Rights, Taxes by Advocates HQ Comments are off

Airbnb to Collect Taxes from Los Angeles Users

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Airbnb, the short-term rental app, has recently agreed to go along with officials in Los Angeles by requiring users to collect hotel taxes from their clients. The three-year agreement was signed early this week. And according to LA city officials, money collected by Airbnb in Los Angeles would bring $5.8 million in annual revenue.

ProtestThe agreement follows the city’s efforts to regulate Airbnb and similar companies locally.

As City Council members discussed what to do with Airbnb in the past few months, the company lobbied its users to stand up against suffocating regulations in a series of emails sent out regularly.

In one of these emails, Airbnb explained that the LA City Planning Commission was considering putting a 90 day cap on the number of nights Airbnb hosts can list their space, a rule Airbnb called “restrictive and arbitrary.” City officials were also considering limiting the number of listings hosts can have, which could affect users who have more than one room to rent, and instituting a registration procedure that would render the process of hosting through Airbnb difficult and expensive.

Another rule LA city officials had considered would also force Airbnb to turn over users’ personal information to the authorities, giving them information on how many nights a host books through the site and how much money renters make. Airbnb warned its users that the city did not detail how this information could be used.

Accusing property owners of evicting tenants to turn their properties into “commercial hotel and motel businesses,” Councilman Mike Bonin was one of the first in Los Angeles to propose Airbnb regulations. But while it is true, many users have, in fact, evicted their tenants in order to list their properties on Airbnb, that alone is not an excuse to regulate Airbnb out of existence. After all, the system works because it’s still affordable.

To tourists looking for an affordable accommodation option, the extra financial burden tied to the hotel tax could mean that renting through Airbnb might not be that affordable after all. To those who use the service as renters to make ends meet, being part of Airbnb may not be as appealing if rates are high because of the new rules.

In an article for US News, Mercatus Center’s Matthew Mitchell urges regulators to “deregulate traditional industries” if their goal is to help all industries and local businesses thrive. Instead of regulating the sharing economy and stifling competition, deregulation could also make it easier for visitors to stay and spend money locally.

Airbnb’s decision to go along with Los Angeles city officials may represent the company’s willingness to compromise, but a real solution to this dilemma will only be produced when lawmakers are honest about their goals.

After all, regulation will always makes things difficult for the consumer and the businessman, no matter how you slice it.

Brewery Forced to Drop ‘LSD’ From Label—In America!

in Business and Economy, Economic Liberty, First Amendment, Liberator Online, News You Can Use by Comments are off

Brewery Forced to Drop ‘LSD’ From Label—In America!

This article was featured in our weekly newsletter, the Liberator Online. To receive it in your inbox, sign up here.

The war on drugs has finally gone too far.

LSDAleIndeed Brewing, a Minneapolis-based brewery, was recently forced to change the name of their LSD Ale after federal regulators thought it sounded too offensive.

Everything had been going alright for Indeed Brewing while it was only selling its products in Minnesota. But the moment the company decided to start selling LSD Ale across state lines, things went sour.

Once the company started working on the licenses needed to expand and start selling outside of the state, federal regulators realized the beer presented a “threat.” The result? Indeed Brewing had to drop the name or stop expansion.

In an attempt to comply without having to drop the product’s name altogether, Indeed Brewing decided to try different hippie-themed labels that kept the beer’s name somewhat under the radar. That didn’t work.

“Unfortunately,” Indeed Brewing co-founder Thomas Whisenand said, “we sell a regulated product and there’s not much you can do when the feds say no.”

To appease federal regulators, the company had to change the ale’s name to Lavender, Sunflower Honey, Date Honey, dropping the terrifying LSD from its labels.

While the name may sound terrifying to some, it does not indicate that the beer is indeed made with LSD. Watchdog.org reports that, if the beer was, indeed, made with LSD, federal regulators would be concerned with things other than the ale’s name. So why are the feds so invested in how the manufacturers chose to advertise the beer?

In the past, multiple states banned the sale of Founders Brewery’s Oatmeal Breakfast Stout because of the baby that appears on the label. According to the Michigan Liquor Control Commission, the advertisement of alcoholic beverages “shall not depict or make reference in any manner to minors,” which prompted the state to ban the sale of the product locally. But what exactly is Indeed Brewery doing wrong?

Nothing, really.

According to research carried out by the Mercatus Center, barriers raised by the federal and state governments are hurting small breweries more than ever, which hurts consumers as a result. Even if the problem is not drug-related, governments will always find something to pick on. It might be a drug-sounding name, or that you do not have a hood for a food oven in your brewery, even though you do not produce food. Or perhaps the fact that your small craft brewery does not have the equipment to handle raw chicken, even though poultry is not an ingredient to any of your products.

According to Mercatus researchers, brewers often face high costs and long waiting times when attempting to obtain a seal of approval from state and federal governments. As associated costs also rise, brewers are often barred from entering the market simply because they cannot afford to meet the unreasonable standards provided by regulators.

In Virginia, for instance, regulators are authorized to deny a small brewer a license because he or she is “physically unable to carry on the business,” or is incapable of speaking, understanding, reading, and writing “the English language in a reasonably satisfactory manner.”

What that even means is beyond reason.

Want to Fight Income Inequality? Enact Extensive Regulatory Reforms

in Economic Liberty, Economics, Liberator Online, Monetary Policy, News You Can Use by Comments are off

Want to Fight Income Inequality? Enact Extensive Regulatory Reforms

This article was featured in our weekly newsletter, the Liberator Online. To receive it in your inbox, sign up here.

Many praised Vice President Joe Biden for talking about the “enormous concentration of wealth” in the hands of “a small group of people,” but to Mercatus Center’s economists and researchers Patrick A. McLaughlin and Laura Stanley, the comments seem out of touch.

BarberWhile politicians from both major political parties often refer to income inequality as an issue that must be combatted, anti-poverty policies are mostly ineffective. In order to further their agenda, many of the politicians who promise to “do something” about the inequality problem often resort to higher tax rates and higher minimum wage policies once they get elected, making it even harder for uneducated and inexperienced individuals to make a living.

Being oblivious about the unintended consequences tied to minimum wage policies and higher taxes, researchers and economists from the Mercatus Center say, is what keeps our economy growth sluggish, and our poor from lifting themselves out of poverty.

Instead of repeating the same mistakes by passing more inefficient policies, free market advocates believe that there’s only one policy that will solve the so-called “inequality” problem for good: regulatory reform.

According to a Mercatus study released recently, regulation can be related to income inequality.

Researches argue that erecting barriers to entry ends up discouraging entrepreneurs at the bottom rungs of the income ladder to start a business. What researchers also found is that countries with more restricting entry regulations have higher levels of measured income inequality. Restrictions to entry makes the higher share of income go directly to the top 10 percent of earners, which is why regulatory reform is so important.

Occupational licensing and other policies that prolong the permitting processes are great examples of barriers that increase the cost of doing business. As a result of the enactment of these policies, low-income earners find it hard to join the market.

According to another recent study, the quality of service provided in many areas seldom changes when licensing is introduced. Currently, all states require licenses from truck drivers, pest control applicators, and even cosmetologists, making it harder for individuals to enter the market without a permit. In some states, even florists need a license to do business. With so many barriers, it’s no wonder low-income individuals prefer to steer away from these occupations, mostly because the cost of entering the market is too high.

While workers in the United States face fewer restrictions to enter the market when compared to several other countries, the regulatory cost of doing business is still too high. If America is serious about putting an end to income inequality, researchers argue, we must put an end to entry regulations that keep entrepreneurs from entering the market legally, not enact more barriers whose unintended consequences are bound to create even more inequality.

Regulations Inhibit Growth, Time to Take The Negative Consequences Seriously

in Business and Economy, Economic Liberty, Liberator Online, News You Can Use by Comments are off

Regulations Inhibit Growth, Time to Take The Negative Consequences Seriously

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Regulations are good, some say. They keep evil elements from hurting consumers. But are regulations doing more harm than good?

By definition, regulations are laws that seek to produce pre-designed outcomes. The way they operate is by changing individuals’ behavior. As federal regulations grow, the number of restrictions on individual consumers and businesses also grow. Over time, the increased number of restrictions may completely close the paths to innovation. Who suffers? Both the consumer and the job seeker.

Regulations

According to a 2013 study, the American regulatory system is so crowded and chaotic that economic growth has slowed by about 2 percent per year between 1949 and 2005. While that doesn’t sound as bad as you might have expected, the real impact of the US regulatory system is hard to assess given the lack of a working process that helps to review regulations and weed out what’s obsolete and harmful. Without a system that helps us identify the issues with the regulations put in place, there’s no way to determine how bad these regulations really are.

While it’s hard to assess the cost of regulation now, earlier studies have at least been able to find that the American regulatory environment has been very bad for growth and very good in stifling innovation and keeping entrepreneurs from sprouting from sea to shining sea.

Despite several administrations’ efforts to modify or cut regulations that simply don’t work, all attempts were in vain.

In order to achieve success, future administrations should not take part in the same failed attempts. According to research carried out by the Mercatus Center, the US government should embrace a series of government reforms in order to remove obstacles to economic growth in America instead.

Based on the success of the Dutch Administrative Burden Reduction Programme and the Base Realignment and Closure Commission’s efforts, the Mercatus team concluded that the American government should begin by promoting an independent review of the regulatory system in place so the burden is assessed promptly and effectively.

But the key to success in this case is true independence.

An independent look into what’s stifling innovation must not be effected by crony influences, since once the influence of particular groups or stakeholders are taken into account, review teams will have a hard time assessing what works and doesn’t. Instead, those tasked with the chore of reviewing regulations should simply focus on how effective regulations have been since they were implemented.

While other steps should also be taken if the US government is serious about trimming the burden of regulations, guaranteed independence in the review process is the most important aspect of successful reforms. If future administrations are serious about growing the economy and helping America prosper, they should prioritize this type of reform. Why? Because removing roadblocks promote the growth of businesses, giving Americans the jobs they so desperately need to live their own version of the American dream.

Free the Hops: Sin Taxes Drive Up the Cost of Beer

in Economic Liberty, Liberator Online, News You Can Use, Personal Liberty, Taxes by Comments are off

Free the Hops: Sin Taxes Drive Up the Cost of Beer

This article was featured in our weekly newsletter, the Liberator Online. To receive it in your inbox, sign up here.

Your favorite frothy adult beverage would be a little cheaper if sin taxes were not part of the equation, according to a new report from the Tax Foundation, a nonpartisan policy research center.

Each state taxes beer by the gallon, with the costs ranging from just 2 cents in Wyoming to $1.29 in Tennessee.

“State and local governments use a variety of formulas to tax beer,” Scott Drenkard writes at the Tax Foundation. “The rates can include fixed per-volume taxes; wholesale taxes that are often a percentage of a product’s wholesale price; distributor taxes (sometimes structured as license fees as a percentage of revenues); case or bottle fees (which can vary based on size of container); and additional sales taxes (note that this measure does not include general sales tax, only those in excess of the general rate).”

There is a trend to be found in the rates, as well. States in the Southeast tend to have the highest beer taxes. Seven of the top 10 states with the highest beer taxes are located in the area of the country known as the “Bible belt.” Northeastern states tend to have lower beer taxes.

Beer Tax

Beer Tax

The Beer Institute estimates that consumers pay $5.6 billion in federal and state excise taxes annually. “Surprisingly, taxes are the single most expensive ingredient in beer,” the beer centric think tank notes, “costing more than the labor and raw materials combined.”

Although the Tax Foundation report does not touch on the cost of federal and state regulation of beer, which adds to the cost of production, particular of micro-breweries and small craft beer producers.

In a June 2014 editorial at US News, Matthew Mitchell and Christopher Koopman, both research fellows at the Mercatus Center, explained that the excessive regulations, which are just another form of taxation, create burdensome barrier to entry for small brewers looking to take their product to market.

“Once in business, brewers face more hurdles. Among the least efficient regulations are the ‘franchise laws’ that restrict their ability to sell beer directly to consumers, instead mandating that they sell through distributors. These rules can even dictate how brewers may contract with distributors,” wrote Mitchell and Koopman. “For example, some grant distributors exclusive territories, and others limit the ability of a brewer to choose to work with someone else. A recent survey found that in most cases, these rules make consumers worse off.”

Beer taxes may be an easy target for lawmakers looking to raise revenue for big government programs and regulation may be a convenient way to protect big beer brewers, but these policies are keeping Americans from the frothy goodness that is their favorite brew. Raise a glass and tell your lawmakers to “free the hops!”

Cosmic Bowling, Gutterballs and Liberty

in Communicating Liberty, Liberator Online, One Minute Liberty Tip by Sharon Harris Comments are off

(From the President’s Corner section in Volume 19, No. 13 of the Liberator Online. Subscribe here!)

A couple of weeks ago I found myself giving bowling lessons — of a sort — to a Sharon Harris - Bowlinggroup of bright young libertarians.

More specifically, I demonstrated to them the fine art of… throwing gutterballs. Over and over. Right and left. How embarrassing!

Thankfully, I wasn’t there to teach these young libertarians bowling. The bowling event — “Cosmic Bowling” — was just a fun extracurricular evening activity at the Foundation for Economic Education’s “Communicating Liberty 2014: Advanced Training” seminar in Atlanta. This great event brought libertarian communication ideas to some of the brightest young minds in the liberty movement.

Forty outstanding student alumni of the Foundation for Economic Education (FEE) summer programs attended the invitation-only event. Without exception, the students I met and talked with were smart, articulate, and enthusiastic proponents of the ideas of liberty. What a joy it was to meet them!

Communication Training - AtlantaI had the pleasure of giving a libertarian communication workshop — sharing the very best tools, techniques and tips on communicating the ideas of liberty. The students were eager to learn and practice the libertarian communication essentials I presented.

FEE brought together a truly outstanding combination of student leaders and libertarian communicators. Speakers included Bob Ewing of the Mercatus Center, Anna Ridge of the Charles Koch Institute, and of course Lawrence Reed, president of FEE and one of the finest spokesmen for liberty of our time.

I left the event humbled by my bowling abilities — but excited about the future of liberty in America. With such gifted and enthusiastic young people gearing up to be the liberty leaders of the next generation, the future looks bright indeed!

FEE is doing outstanding work with its outreach to young people, and I was proud to be a part of this great program. FEE is the oldest libertarian think tank in America — it is impossible to imagine today’s libertarian movement without its pioneering work — and it continues to do cutting-edge essential work in educating the public and reaching out to rising young libertarian leaders to prepare them to be ambassadors for liberty.

I strongly recommend that Liberator Online readers learn more about the great things FEE is doing.

To learn more about Advocates libertarian communication workshops, visit here.