NOT SO FREE ENTERPRISE
by Virginia Postrel • Sep 16, 2003 at 10:16 pm
My facialist/waxer/all-round grooming aide Denise is one of those newly self-employed people who make Timesmen gloomy and bloggers like InstaPundit and Kausfiles sit up and take notice. (By way of background, scroll down to the September 7 entry on Kausfiles and check out the "cottage industries" entries on GlennReynolds.com.) Recession or no recession, she decided to quit her spa job and go into business for herself, starting about a month ago. She rents a room in a suite of people in related businesses--hair stylists, colorists, massage therapists, etc. These microentrepreneurs share some tastefully decorated common spaces--restrooms, a laundry room, seating in the hallways--but furnish their own small facilities, buy all their own supplies, and manage their own affairs. It's a clever real estate arrangement, well suited to these small aesthetic businesses.
Late last week, one of the other tenants told Denise that an inspector from the state cosmetology commission was on the premises. In her two decades in the field, it was the first time she'd ever seen of an inspector, but Denise wasn't worried. Her cosmetology license is up-to-date, and her facilities are immaculate. (She's a bit of a clean freak.)
Little did she know that the state requires an "independent contractor's license," which entails no additional qualifications, merely a $65 fee. This license is, as far as I can tell, purely a shakedown. You pay your money and give them your address. The license has nothing to do with either professional qualifications (that's the cosmetology license) or tax payments (that's another state department). But those $65 fees add up. And if you don't have the independent contractor's license, you get socked with a $500 fine--precious working capital Denise had planned to use for supplies. (Her landlord got hit with a $1,000 fine for each contractor who lacked the required license.) She is not a happy entrepreneur.
After a bit of rooting around, I managed to find some some mention of the independent contractor's license on the state cosmetology commission's website. But it would be very easy to overlook that information, which isn't featured on the home page. From a first glance, you'd think the commission was concerned with professional qualifications and protecting the public from bad perms and mangled manicures. But you'd be wrong.
This harassment is happening in business-loving, entrepreneur-celebrating Texas. It persists because this sort of petty bureaucratic hassle--and the associated hidden taxes--is so routine that it doesn't constitute "news" and hence never becomes a political cause. But it's stifling business expansion just when the economy most needs it, and it's punishing bold, productive people.
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