Break the Chains Act (Take 2) [LAW'D]

[Badger]

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Sponsor: Senator Libertas
Bill Slot: 2

I offer the following amendment (we can renumber paragraphs if/when passed). Tiny mini-chains are part of the solution, not the problem. See my early remarks in the Senate record. I really don't like even paragraph 2 as such small regional chains are more competition against the mammoth national conglomerates like McDonald's and Wal-Mart.

HOWEVER, as Senator Libertas has clearly made an effort to compromise in reintroducing this legislation, and the Senate has spent plenty of time on this already, I'll grit my teeth--hard--and offer only the amendment to eliminate the truly overreaching first paragraph.

The only remaining question is whether this new version, particularly the last paragraph, is acceptable to the Administration. If you could please chime in here soon, Mr. President....

We're close. Methinks I see a light at the end of the tunnel.

[Badger]

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Sponsor: Senator Libertas
Bill Slot: 2

I offer the following amendment (we can renumber paragraphs if/when passed). Tiny mini-chains are part of the solution, not the problem. See my early remarks in the Senate record. I really don't like even paragraph 2 as such small regional chains are more competition against the mammoth national conglomerates like McDonald's and Wal-Mart.

HOWEVER, as Senator Libertas has clearly made an effort to compromise in reintroducing this legislation, and the Senate has spent plenty of time on this already, I'll grit my teeth--hard--and offer only the amendment to eliminate the truly overreaching first paragraph.

The only remaining question is whether this new version, particularly the last paragraph, is acceptable to the Administration. If you could please chime in here soon, Mr. President....

We're close. Methinks I see a light at the end of the tunnel.

I'm not sure whether it's accurate to call 15+ stores a "tiny mini-chain". I mean even these so-called 'regional chains' are part of the problem, not the solution. My goal was to empower individual small business owners. We're talking here about generic chains found across many states that still have inherent advantages in out-competing unique local businesses.

A corporation with 15-39 stores will be able to get cheaper bulk wholesale goods and be in a stronger negotiating position than a local family business of 1 or 2 locations.

0.25% is such an infinitesimally small tax to place upon profits; is it really a deal-breaker for you?

To be honest under normal circumstances imposing any tax on businesses with under 100 stores would be a deal breaker, and if I had my druthers I'd propose an amendment eliminating lines 1 and 2. But given you'd likely find that going too far despite your efforts at reaching middle ground, and  considering the time the Senate has already burned here, as said I'm willing to grit my teeth and only propose striking line 1.

BTW: You never answered my early query as to whether "differential tax" was a more concise way of imposing the relevant tax rates on a per store basis, as was the case with the amended version passed. For the reasons I previously stated (and supported by other senators) that is a very important issue here.

To answer your question, yes, either one of those changes would likely cause me to vote nay. In good faith I'm already stretching past the point of what I feel comfortable supporting already. If I was in full poker playing, horse trading, deal making mode I may've proposed striking lines 1 & 2 but ultimately grudgingly probably accept striking 1 only (plus ensuring the tax was imposed on a per store basis and PS would accept the last paragraph's restriction on uses of revenue). But I believe the Senate's getting tired of dealing with this proposal so I skipped the gamesmanship and went straight to the bottom line.

[Badger]

To be honest under normal circumstances imposing any tax on businesses with under 100 stores would be a deal breaker, and if I had my druthers I'd propose an amendment eliminating lines 1 and 2. But given you'd likely find that going too far despite your efforts at reaching middle ground, and  considering the time the Senate has already burned here, as said I'm willing to grit my teeth and only propose striking line 1.

BTW: You never answered my early query as to whether "differential tax" was a more concise way of imposing the relevant tax rates on a per store basis, as was the case with the amended version passed. For the reasons I previously stated (and supported by other senators) that is a very important issue here.

To answer your question, yes, either one of those changes would likely cause me to vote nay. In good faith I'm already stretching past the point of what I feel comfortable supporting already. If I was in full poker playing, horse trading, deal making mode I may've proposed striking lines 1 & 2 but ultimately grudgingly probably accept striking 1 only (plus ensuring the tax was imposed on a per store basis and PS would accept the last paragraph's restriction on uses of revenue). But I believe the Senate's getting tired of dealing with this proposal so I skipped the gamesmanship and went straight to the bottom line.

I am willing to negotiate on the numbers, but not on the return of the pointless and destructive 'on the most recent' clauses. I've never seen a compelling reason in favor of that proposal, but plenty of arguments against it. It accomplishes nothing but to weaken the entire bill. It was the real deal-killer for me on the previous version.

This is not a stimulus package for bureaucrats, accountants, and the paper mill industry.


As for your view on chains in the 15-39 range, you never addressed the fact that they do in fact have advantages over local family businesses just like their larger siblings do. It's fair to thus apply the same tax to them, just at a smaller rate (in this case a minuscule quarter of a percent of their profits).

I'm also willing to compromise on the numbers in line one, but not on the applying the tax on a per store basis. Do you really think any business this size doesn't already watch like a hawk the exact yearly profit each store produces? Their accountant could produce those numbers up on the company's bookkeeping program within 30 seconds.

Amendment proposal coming momentarily.

[Badger]

Break the Chains Act (Take 2)

1. Companies or individuals which possess 15-39 retail outlets or stores, inclusive, shall be assessed a differential tax of 0.25% on their annual profits.

2. Companies or individuals which possess 40-85 retail outlets or stores, inclusive, shall be assessed a differential tax of 0.5% on their annual profits.

3. Companies or individuals which possess 86-175 retail outlets or stores, inclusive, shall be assessed a differential tax of 1.0% on their annual profits.

4. Companies or individuals which possess 176-300 retail outlets or stores, inclusive, shall be assessed a differential tax of 1.5% on their annual profits.

5. Companies or individuals which possess 301-450 retail outlets or stores, inclusive, shall be assessed a differential tax of 2.0% on their annual profits.

6. Companies or individuals which possess 451-999 retail outlets or stores, inclusive, shall be assessed a differential tax of 2.5% on their annual profits.

7. Companies or individuals which possess 1000 or more retail outlets or stores shall be assessed a differential tax of 3.0% on their annual profits.

7. 8. Funds collected from these taxes shall be appropriated to the Atlasian Small Business Administration for expansion of current SBA programs for offering and/or guaranteeing small business loans to existing and new small businesses, unless and only if otherwise allocated by subsequent legislation.

9. All taxes on profits will be assessed on a per store basis, with the applicable tax bracket determined by the chronological date the store/outlet opened for business to the public.

This is no different then the current income tax system where different tax rates apply to income earned within that tax bracket. Think about it senators: What would each of you say to a tax system that instead of taxing personal income between $30-$50k at 15% and income over $50k at 25%, rather when someone earned $50,001 in a year resulted in their entire income being taxed at 25%, while their neighbor who managed to earn only $49999 that same year only paid 15% tax? What would you say about that system's fairness? About its impact on incentives to earn more and be more productive?

Well, that's the exact same bass-ackwards system proposed here, and all the cogent arguments for opposing such an "all or nothing" application of tax brackets to personal income apply equally well here. And this amendment fixes that problem.

(My apologies if the first version seemed too wordy, but as a lawyer I abhor poorly crafted loophole ridden laws, and real life has PLENTY. Fortunately, the very, very very extensive legislative history here should leave no doubt to the courts as to the intent of this abbreviated version )

[Badger]

This wouldn't kill the bill, though I dunno if it's neccessary. If we are structuring it like the income tax, wouldn't it make more sense to use the location's profitability instead of the location's age?

I'm not sure I understand your question, BK. Just to be clear, the taxes are being imposed on a store's profits. The applicable tax bracket (i.e. what "number" the store is for determining its tax rate) is determined by the store's age.

But yes, it makes perfect sense to base rates of stores on the order in which they opened. Assessing the tax rate retroactively to an entire business when they cross a threshold number of stores is unfair and needlessly anti economic growth. Again, simply ask your yourselves before voting if you would want the same standard implemented for personal income taxes? Of course not. So can anyone explain why doing so here isn't an equally bad idea?

[Badger]

This wouldn't kill the bill, though I dunno if it's neccessary. If we are structuring it like the income tax, wouldn't it make more sense to use the location's profitability instead of the location's age?

I'm not sure I understand your question, BK. Just to be clear, the taxes are being imposed on a store's profits. The applicable tax bracket (i.e. what "number" the store is for determining its tax rate) is determined by the store's age.

But yes, it makes perfect sense to base rates of stores on the order in which they opened. Assessing the tax rate retroactively to an entire business when they cross a threshold number of stores is unfair and needlessly anti economic growth. Again, simply ask your yourselves before voting if you would want the same standard implemented for personal income taxes? Of course not. So can anyone explain why doing so here isn't an equally bad idea?

No, it doesn't make sense; you keep repeating the same things without ever backing them up.


And your comparison to personal income tax is disingenuous for several reasons:

A) You are talking about a personal income tax on individuals. This is a tax on corporations.

B) You are talking about a tax on income. This is a tax on profit.

C) You are talking about tax brackets where the rate of taxation on income leaps up from 15 to 25% from one bracket to the next.

Here we are talking about a tax on profit that increases by a measly quarter or half of a percent from one bracket to the next, with a maximum rate of just 3.0%.

A) Utterly irrelevent distinction.

B) Ditto.

C) Yes, its a relatively small graduation compared to income tax rates, but so what? Are you telling me if under the tax system you propose you earned a dollar over the threshold level to the next highest tax bracket you wouldn't feel cheated because that single dollar cost you "only" an entire half percent of your yearly earnings? You wouldn't mind that earning $100,000 instead of $99,999 cost you an extra $500 in taxes?

We obviously won't agree so the Senate can decide on these 2 amendments offered.

[Badger]

No, it doesn't make sense; you keep repeating the same things without ever backing them up.


And your comparison to personal income tax is disingenuous for several reasons:

A) You are talking about a personal income tax on individuals. This is a tax on corporations.

B) You are talking about a tax on income. This is a tax on profit.

C) You are talking about tax brackets where the rate of taxation on income leaps up from 15 to 25% from one bracket to the next.

Here we are talking about a tax on profit that increases by a measly quarter or half of a percent from one bracket to the next, with a maximum rate of just 3.0%.

A) Utterly irrelevent distinction.

B) Ditto.

C) Yes, its a relatively small graduation compared to income tax rates, but so what? Are you telling me if under the tax system you propose you earned a dollar over the threshold level to the next highest tax bracket you wouldn't feel cheated because that single dollar cost you "only" an entire half percent of your yearly earnings? You wouldn't mind that earning $100,000 instead of $99,999 cost you an extra $500 in taxes?

We obviously won't agree so the Senate can decide on these 2 amendments offered.

The first two points are very relevant. By your refusal to address them, I assume you've conceded.

Sure, Libertas. And night is day, up is down, black is white....

[Badger]

AYE.

[Badger]

Oh c'mon, does Badger ever give up trying to destroy this bill? Talk about obstructionism...

Senator Badger has never given a compelling reason to support this sort of thing, and I've thoroughly demolished his attempts to do so earlier by making a disingenuous comparison to the personal income tax. All this amendment would do is substantially weaken an already weakened-bill, while creating a lot more work for accountants and bureaucrats, plus a lot more dead trees.


A resounding NAY!

Oh Libertas.

My "obstructionist" measures have helped to take what was intially (in Take 1) a bill opposed by a vast majority of the Senate and transform it into one that has already passed once, and may likely do so again if this amendment is approved. For that matter isn't it a bit disingenuous for you to level accusations of "obstructionism"? When the Take 1 version of this bill only needed modifications making it quite similar to this current proposal in order to earn Purple State's signature, you instead withdrew the bill altogether.

Frankly, Senator, I've worked hard to save this measure, not destroy it. This crucial amendment is part of that process.
Now back to the bill itself. The "lot more work for accountants and bureaucrats" claimed here is based on the preposterous misconception that businesses don't already know two simple pieces of readily available information:

1) The order in which their stores were opened; and
2) The annual profit of each store.

Rhetoric aside, can anyone specifically explain how any business with at least 15 stores wouldn't already know this (or at worst, figure it out within minutes)? The owner of a smaller chain could probably tell the order of the last several stores they opened off the top of their head. As for larger chains, even I was able to get that information for Wal-Mart in a minute on-line!

http://www.econ.umn.edu/~holmes/data/WalMart/store_openings.csv
http://www.econ.umn.edu/~holmes/data/WalMart/store_openings.html

Again, stores already know this stuff. As for store profits, does anyone really believe that any business (or at least one successful enough to expand to at least 15 stores) doesn't already watch their profits from each store like a hawk to stay competitive and respond to changes in demand? Most probably closely record weekly store profits, let alone annual profits. That's Business Management 101.

Sweeping inaccurate generalizations about "increased bureaucracy" are entertaining, but in reality this amendment keeps imposition of taxes under this measure simple, makes assessment of such tax rates infinitely fairer, and doesn't create artificial "lines in the sand" against economic growth.

Accordingly, I vote: AYE.

[Badger]

I've thought about this more....and I still believe this amendment is necessary to ensuring the overall fairness of this legislation. I sympathize with Libertas' position, but I won't be changing my vote here.

How so? I've pretty much destroyed all of Senator Badger's arguments, both here and in PM. This should be about the issues, not personalities or parties.

And it certainly is. You will have noticed that I've never had a problem supporting bills and amendments that you wrote that I've found sensible.

Well it doesn't seem that way to me. You never responded to my last PM, and Badger gave up debating instead apparently hoping to just get this passed on weight of personality. I've been open to compromise and proposed a substantially weakened bill but apparently no matter what Badger was going to have a problem and demand that he get an amendment that he wrote somehow put into the bill, even if it further weakened and worsened the bill. I hope you and others who voted aye will reconsider holding up the bill for what is in my view a bill-killing amendment.

Oh boy....

Forgive me for continuing such back and forth, Senators, but this demands a response.

Dear Libertas:

1) I realize assessing points in a debate is very much in the eye of the beholder, but you have an interesting definition indeed of "destroying all of [my] arguments". You must've saved all your most cogent and "destructive" arguments for PMs rather than spend them on the Senate floor.

2) Kindly don't confuse not wanting to subject 8 other senators to a continued back and forth (again, sorry guys) and absolutely having to get the last word in as "giving up debating".

3) Let's get the record straight regarding willingness to compromise, shall we? I contacted you via PM and offered to compromise on this matter. A bill was passed by the Senate not too far off this version as amended. Now you talk about the amendment being a "bill-killer"? Please, quit being a zealot. If you think the tax rates are too low from the amendment then propose a reasonable raise! FWIW, I feel doubling the rates is definitely too much, but somewhere in between, especially on the larger corporation brackets, would probably be acceptable.

Bottom line: this bill is not far off from the one passed by the Senate, and even closer to the one you proposed the second time around. I sincerely hope you'll prove me wrong and vote for the final bill, even with reasonably raised tax rates, instead of taking your ball and going home.

[Badger]

It's not a deal breaker for me...but isn't that increase a little high compared to the bill that appears to have a majority?

(I also object to the amendment being accepted as friendly, as I would like to see a vote on it. There's no use amending this to something that won't be able to pass.)

I'd echo Franzl's sentiments. I worry these proposed increased rates might keep the bill from being passed.

IMHO, the jump in tax rates for the bottom 2 categories from 0.5% to 2.0% and 0.25% to 1.5% seem awfully dramatic. Maybe we could consider leaving such rates for smaller businesses at/closer to the original tax rates and instead raise similar revenue by increasing rates on the largest 2 categories of business to (e.g.) 4.5% and 5.5%? That would fit better with the underlying goals of this bill to discourage non-stop growth of national conglomerates while encouraging small business expansion, and also probably increase the likelihood of the bill passing.

It'd sure cement my aye vote anyway.

[Badger]

Sorry, Libertas. While I'm OK with the proposed increased rates for larger businesses, increasing the proposed tax rates for smaller chains by 4 and 6 times the original proposal is just too much.

NAY.
 
I'll say up front though that, even though I oppose it, this amendment is not a deal breaker for my supporting this bill at final vote.

[Badger]

Aye.