Monday, December 1, 2014

Great Job Breaking It, Hero

The European Union, in typical European fashion, has just placed a crushing burden on every small business owner, just when we can least afford it. In case nobody in the hallowed halls of Antwerp haven't noticed, we're in the middle of an economic downturn. That means that jobs are hard to come by, and it becomes all the more essential that people be able to make a living without having to first obtain the permission of an employer -- which means being able to start and operate your own small business in order to make money selling to carefully chosen niche markets that are too small and specific for the big operators to bother with.

The rise of the Internet has meant that small business operators can tap such markets not just in their immediate locale, but around the world -- until this utter travesty known as VAT-MOSS (Value-added tax mini one-stop shop) has come forth. It places documentation burdens on online sellers of digital goods that, while trivial for big players such as, are crushing for the little guy who just wants to bring in enough money to keep a roof over his head since he got laid off at his formerly well-paying job, without being a burden on society.

Chris Meadows has a summary of just how impossible it is for small businesses to comply with these new regulations without incurring crushing burdens.

The truly ironic thing about it is that it came about as the result of smaller players complaining that big internationals such as were gaming the system, locating their European headquarters in places such as Luxembourg which had unusually low VAT and as a result not paying their fair share comparative to smaller players who were more restricted in their ability to relocate. Which is yet another example of "be careful what you wish for, you might get it."

Because of the way the law is written, there are even questions about whether it could pull American businesses into its net. In theory it's possible, but in practice, an American who does only a tiny amount of business with EU citizens and has no plans to ever travel to any EU member state probably has little chance of running afoul of an EU bureaucrat determined to make an example of them.

Still, it is yet another example of  how over-regulation is choking economic growth. Yes, there do need to be some basic laws and regulations, ground rules to make sure that the selfish and manipulative don't prey upon the weak. But not this maze of rules that are literally impossible to comply with or enforce, for the simple reason that the people writing them have no concept of how they will actually work when put into practice.

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