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Taxicab Testimony

Taxicab Testimony

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Published by: The Institute for Liberty on Jan 10, 2009
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06/17/2009

 
1250 Connecticut Ave, NW, Suite 200Washington, DC 20036(202) 261-6592www.instituteforliberty.org
Statement of Andrew M. LangerPresident, Institute for Liberty
Good morning. My name is Andrew Langer, and I am the President of the Institute forLiberty. IFL is a non-profit advocacy organization based here in DC. We focus onthe impact of government policy on small business and entrepreneurship. I have beena small business advocate for nearly a decade, most recently before the federalexecutive branch with the nation’s largest small-business trade association.I’m here because I think something was lost in the process by which the District ofColumbia came to the decision to mandate that all taxicabs must have fare metersinstalled within them. Specifically, I believe the district’s leaders failed toassess the impact of this mandate on the small businesses falling under theregulation’s scope.Before I speak on the specific problems in this instance, I want to talk a little bitabout small businesses generally—and the difference between small and big businesses.Small businesses are the engine of this economy. 90% of small businesses have fewerthan twenty employees, and they provide 2/3 of all new jobs. They are also the mostvulnerable to the impact of new regulatory regimes.Regulations cost more for small businesses. It is difficult for them to find outabout new regulations, and because they lack the specialized expertise available tolarge businesses, it costs them more to figure out what the need to do to comply withthem. According to the SBA’s Office of Advocacy, federal regulations alone costroughly $7700 per employee, per year, for businesses with fewer than twentyemployees. That number drops by about 1/3, to just over $5000, when those businessescross that twenty employee threshold.The reason for this is simple. When a business grows, the business owner (who hasbeen, up to that point, responsible for discerning the regulatory obligations of thebusiness) can hire a regulatory expert full-time. Usually, that person is aspecialist in HR and employment law. The business can also spread capital costsaround, gaining economies of scale unavailable to the small business owner.And because of the importance of small business within the economy, and recognizingthe different difficulties facing them, Congress has enacted a series of laws at thefederal level, protecting small businesses within the regulatory process. Mostnotable is the Small Business Regulatory Enforcement Fairness Act, which, among otherthings, mandates that agencies assess the impact of new regulations on smallbusiness, review regulations currently on the books for their small business impact(and make appropriate changes), and sets up a “small business ombudsman” program, so

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