Citizen Journalist: A plan for boosting local economic development
by Mike Martin

June 27,2008

A recent comment from statehouse candidate Chris Kelly reminded me how I started writing for publication 15 years ago.

To staunch the flow of illegal immigrants, Kelly asserted, we must crack down on the businesses that hire them.

But as I noted six years after starting an environmental engineering firm in the Seattle area, by clouding the American dream with a fog of disincentives, government shares as much if not more blame for problems like illegal immigration and the lack of American competitiveness that inspires businesses to hire undocumented workers.

American dreamer

"So you want to start your own business, create prosperity, hire good employees and create taxpayers," I wrote, from my own experience, in a 1993 article for the Puget Sound Business Journal. "So you want to live the American dream."

You, Mr. or Mrs. Honest Entrepreneur I presumed, want to make sure your vendors get paid. You want to make payroll, on time, every time, because you're responsible for the livelihoods of your new hires, with their young children and pregnant wives and disabled husbands.

You've just signed a three-year lease on your new office space and you want to pay your rent. You want to render unto Caesar – pay your taxes, too. Ultimately, you want to grow, "maybe a little, maybe a lot."

"I'm convinced that most people who go into business are honest, hard-working American dreamers," I wrote. "Just the kind of people America needs."

But then, as now, we discourage the dream of hard work, suitably rewarded with a gauntlet of greed – not the corporate variety, but the government kind.

Take our new business owner, "Sam." From the day Sam opens her doors, she'll become a tax collector for the State of Missouri and Uncle Sam, rendering everything from sales taxes to employee taxes and a cartload of other tribute besides.

Once Sam incorporates, she'll pay a "franchise tax" just for doing business in Missouri – even if she hasn't earned a dime. If she makes money, she'll pay a corporate income tax, too.

When Sam decides to hire even one legal employee – call him "Joe" – the first thing she'll have to do is apply for an IRS EIN – Employer Identification Number. In with Joe – a legal U.S. citizen – will march Caesar’s army: federal withholding tax; Social Security withholding tax; Social Security employer tax; Medicare tax; federal unemployment tax; state unemployment tax; and state disability taxes, all demanding that Sam collect and remit them at least four times a year for as long as she stays in business.

The paperwork alone will become a logistical nightmare.

Ditching the disincentives

On Joe's first day, a battalion of employee-related regulations will storm Sam's business, too. Many regulations – like child labor laws and worker safety standards – are critical. But just as many others are the cudgels of a conspiracy that pads the pockets of lawyers and bureaucrats.

So atrocious and unethical has this conspiracy become that it finally blew up in some unsuspecting faces. Trial attorneys like Richard Scruggs, Bill Lerach and Melvyn Weiss – notorious for a competitiveness-killing creature of the U.S. legal system called the “baseless corporate class action lawsuitâ€