Lex Anteinternet: The National Retail Fairness Act advances. Picking up opposition.

I guess I shouldn't be too surprised.

We ran this item last week:

Lex Anteinternet: The National Retail Fairness Act advances.: The Tribune attempted to report on a bill gaining traction in the Legislature this morning that's quite interesting. I say attempted, ...

At that time, the bill was advancing rapidly, suggesting that the movers in the legislature liked the bill and wanted to get it passed.

Well, not everyone does, this bill in the form of an editorial from one Joe Rinzel.

Now that in and of itself is significant.   Rinzel isn't your next door neighbor.  He's head of a national organization entitled Americans for a Modern Economy and associated with another called Employers for Renewable Energy).  Americans for a Modern Economy states, about itself,

Our Mission

Americans for a Modern Economy is committed to ensuring that local, state and federal policies reflect changing technologies that are reshaping the way consumers, businesses and communities operate in the 21st century economy.

We work with consumer advocates, businesses, think tanks, economic experts and others to raise awareness and inform discussions about the current and future policy challenges of new technology. We serve as a resource for lawmakers to help them develop modern policy solutions that benefit all Americans by expanding consumer freedom, allowing businesses to best serve their customers and preserving free market competition.

Now, I've never heard about it before, but let's start right there with the claim that it wishes to preserve "free market competition".  In order to preserve it, it'd be necessary to have it.  But because of the structure of  the American Capitalist economic system, we don't have one.  We have a mixed state supported one, as corporations are by their very nature corporate entities that have been created by state action.

Now, don't get me wrong, I'm not advocating for Socialism (not by a long shot), but I 'm advocating for truth and knowledge, and the often claimed American belief that we have a "free market system" isn't wholly correct but only partially so.  As corporations are natural creatures roaming the economic prairie in a state of nature, but a partnership converted into a "person" at law by operation of the state, they're a state supported entity.

Indeed, at least in law schools, or at least in the musty dawn of time when I went to law school, the creation of corporations was regarded as an act of legal genius by economies then converting from mercantilism to large scale global capitalism.  We like to think, of course, of the global economy coming into existence last Thursday or something, but that's very far from true.  Really old corporations, like The Hudson's Bay Company, came into existence long, long ago with gobal competition in mind. 

And incorporating your small business, or creating a limited liability company, is for most business entities a really, really good idea.  

But let's not be naive either.  The development of corporations has created a system in which corporations have the advantage over individuals (the real kind, i.e., people) and over partnerships, as they shield what would have been partners from individual liability, save for their own. That wouldn't have been the only way to go about that in terms of legal development (but it probably is the best way it could have developed for societal reasons), but its a fact.  And that aids economy of scale.  I.e., it promotes businesses getting big at the disadvantage of the small.

Again, I'm not saying which is good or bad, but what this does mean is that in some sectors of the economy, such as retail, large corporations have an enormous advantage over the small.  Call it the Walmart effect if you will, but this is why, over time, Big Box stores have eliminated lots of local business.  And most people feel that's bad.  As its done that, it's also converted the retail sector from one where individual shopkeepers could make middle class livings from their families into one in which those same families are likely struggling to stay afloat economically or have simply given up and been driven into other occupations.

It also means, as the proponents of this bill know, that these big corporations don't contribute as much economically, in some ways, to their local communities. And, moreover, as they're national, and not local, they've already featured the cost of taxation into the prices of what they offer on the shelf.  In other words, Walmart isn't going to retab anything anywhere if Wyoming starts taxing its income.  It's already built the cost of taxation into the shelf price.

Well, Rinzell warns otherwise, starting off his alarming piece with:

While Wyoming has a storied history as a leader in ranching and agriculture, it is now working to become a pioneer in robotics, artificial intelligence and machine learning that will propel the state’s economy into the 21st century and benefit consumers and businesses alike. But a bill rushed through the state House threatens to undermine the state’s status as an innovation hub and could rein in the next generation of Wyoming’s economic growth.

Hmmm, why would that be true, we might ask.  If a Wyoming corporation is going national, would it actually be the case that the small amount of whatever it sells in the least populous state in the union is going to impact its bottom line, if its taxed?  Particularly if its going to be taxed elsewhere?

We might take a page from the coal severance tax that funded Wyoming's education for decades.  This exact same argument was made about it.  Pass the tax, and the mines will not develop, and it'll be a disaster.

It wasn't.

House Bill 220 seeks to replace some of that severance money that the collapse of coal has brought about. The money would go to education.  The small amount of tax added isn't going to effect the bottom line of any corporation that pays it. They've already figured that into the bottom line.  Basically, Wyoming would just be giving money away by not passing the bill.

Which doesn't mean that drawing the opposition of this national group isn't remarkable.  It is.  But it's remarkable for that reason.  The bill, which won't impact any national corporation of the type its aimed at, is so adverse, apparently, to the goals of a group that bills itself as for a "modern economy" that it actually has addressed it in a local paper, and when doing so  it was clear that the author had done some research about the state he's not from and doesn't live in.

Which gets us back, I suppose, to the question that Wendell Berry asked so long ago.  "What are people for?"  There's pretty good evidence that the economy needs some tweaking for most people at this point of some sort.  Perhaps not radically so, but perhaps so.  Just barrelling along in the direction we're heading, modern or not, should at least cause some reflection.