A new IRS proposal to require licensing all tax preparers would put a lot of people out of work. Not everyone can afford to pay for classes, exams, fees, and continuing education courses. It would also artificially tip the competitive scales in favor of H&R Block and other big tax prep firms. So the Institute for Justice is suing. This video explains why (click here if the embedded video doesn’t work):
The video doesn’t make an important argument: If the IRS has the power to grant licenses, it also has the power to take them away. Tax preparers had better be careful not to fight too hard for their clients’ interests. Nice career you have there. Shame if anything were to happen to it.
Caleb Brown and I wrote about that angle in a piece for Investor’s Business Daily.
Businesses often use regulations as a cudgel to bludgeon their competitors. Occupational licensing is one of the most-abused types of regulation. John Stossel’s latest column shows how by telling the story of Jestina Clayton, an immigrant from Africa who braids hair for a living.
Her customers are satisfied. But now her competitors want her to take 2,000 hours of classes and spend thousands of dollars to get a cosmetology license. This even though braiding is the only service Jestina offers. And because the her competitors are the very people who grant or deny licenses, it will be easy for them to keep entrepreneurs like Jestina out of business even after she completes the licensing requirements.
Jestina’s story repeats itself every day in any number of occupations. Stossel writes:
Once upon a time, one in 20 workers needed government permission to work in their occupation. Today, it’s one in three. We lose some freedom every day.
“Occupational licensing laws fall hardest on minorities, on poor, on elderly workers who want to start a new career or change careers,” Avelar said. “(Licensing laws) just help entrenched businesses keep out competition.”
This is not what America was supposed to be.
Posted in Competition, Economics, Regulation of the Day
Tagged avelar, competition, cosmetology, cosmetology license, counterproductive regulations, ij, institute for justice, jestina clayton, john stossel, licensing, occupational licensing, restricting competition
This new video from the Institute for Justice is funny and sad at the same time.
This short video from the Institute for Justice is inspiring.
See also my colleague Marc Scribner’s article in the Daily Caller.