Government's Crippling Effect

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Government's Crippling Effect

By Don Longo, Convenience Store News - 10/19/2009
The current administration and Congressional majority is wrong on just about every major issue that impacts the convenience and petroleum retailing industry. Almost every plan being considered today is likely to make economic conditions worse, not better, and the overwhelming costs of most of these proposals will fall on your businesses and your best customers.

Despite this summer's town hall outcry against the Democrat-led health care plan, we could still end up with legislation that greatly expands the scope of the federal government, puts health care decisions in the hands of bureaucrats rather than citizens and their doctors, and greatly increases the demand while reducing the supply of health care (leading to Canadian-style waiting lists for essential services). To cover the costs of creating this new government bureaucracy, greater financial burdens would be imposed on employers who will either pay higher costs or drop the coverage they currently provide, even if it means paying a fine.

Another potential boondoggle is cap-and-trade legislation. Speaking to the United Nations last month, President Barack Obama promised a serious U.S. effort to curb greenhouse-gas emissions that can cause climate change. So-called cap-and-trade legislation is due to be taken up again in Congress this month. Like the health care reform proposals, the cap-and-trade bill imposes a big-government, tax-heavy solution on an admittedly complicated issue.

The true cost of carbon cap-and-trade regulations will be nearly $2 trillion over the next decade, and since businesses that are forced to buy credits will pass this expense to consumers -- all Americans, and our grandchildren, will pay for it. This is basically a huge tax that hits the middle class the hardest. In addition, it makes our industries less competitive with countries such as China and India, which are not adopting the stringent environmental rules.

The most recent example of nanny-state run amok is the Food and Drug Administration ban on the sale of flavored cigarettes. Does anyone think banning flavored cigarettes will stop children from smoking? While banning some tobacco products, the government continues to raise taxes on others. This is a huge regressive tax that politicians can impose on smokers -- a group of people who have relatively little political clout. Meanwhile, cigarette volume continues to shrink, meaning the government has to raise taxes even higher to recoup lost revenue. And if you think this problem is limited to tobacco, think again. Soft drink makers, fast-food retailers and makers of any products that could be unhealthy if consumed in massive quantities better watch out. They'll be targeted next.

The one issue where government intervention really is needed -- bringing fairness to how credit card transaction fees are levied -- could be overshadowed by the aforementioned higher-profile matters. The c-store industry pays nearly twice as much in credit card fees as it makes in annual profit. Bills enabling retailers to jointly negotiate new interchange rates and terms with the credit card companies, and curb "abusive" rules imposed by those companies are still stuck in committee.

So what can you do?

The first step is to support NACS' lobbying efforts both financially and with personal participation. But that's not enough. Make your customers aware of these issues so they will lobby their elected representatives. We should applaud the efforts of companies such as 7-Eleven, Circle K and others that collected petitions from consumers complaining about the impact of skyrocketing credit card interchange fees. The same should be done about health care and climate legislation, along with unfair tobacco taxation.

Consumers need to be educated by retailers about the ill effects of government policies, laws and regulations on their local merchants -- and on their own wallets.