Taxes and Regulations

Higher taxes is particularly interesting to me, because we had a heyday of small business development and innovation after WWII, when taxes were high to pay down the war debt, something like 90% on biz. Neutra and locally Roland Terry designed bauhaus inspired minimalist homes which were cheaper and faster to build (about 80% of the cost of a house is the last 20%, the finishes and flourishes) ... Since the govt was taking all of your profits, you built a minimalist house, and spent all of your money pretax on your business, the offices, the accourtrement, travel, etc. The business was the lifestyle. You can drive down rainier avenue and see some of the cool med-century office small biz office bldgs from this era, and inside they were very cool too. Small biz people will simply change how they allocate their assets and declare them on taxes.

Against this we have new regs that militate small businesses from forming, such as "sand" is now hazmat according to the EPA and has control and reporting requirements similar to anthrax. In Washington if you have more than three employees you must allow people off the street to use your restrooms. On January 1 alone, 40,000 new laws went into effect in USA, according to ABC TV. There are thousands, perhaps millions, of other rules and fees that just crush any competition for big biz. One of the harms done during the dotcom and real estate booms is people were misallocated from starting their own businesses into the malinvestment of those to booms. So we missed their contributions, plus they were not there to object to the degeneration of the business milieu.

One small advantage, corporate taxes will show up in the price of end user goods, mostly commodity items. This means that innovative items will be in some measure more price competitive, perhaps spurring more innovation, to some degree.

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