Why the New Generation Has Fewer Options that in the Past

Individuals turning into adults now certainly have a lot of advantages.  Many more have had the opportunity to go to college than in their parent’s and their grandparent’s generation.  They also have easy access to information and world markets.  Anyone can put something on eBay and the whole country or the whole world can bid on it.  There is also the ability to publish things more cheaply and easily than before.  I can write the blog and have the world read it for free.  A song writer could put a recording on YouTube for free.  A movie producer could make a video and put it on YouTube as well.

There are many disadvantages, however as well that make it difficult to start a business.  In the 1800’s, if you wanted to start a hot dog stand, you would just make some hot dogs, start a little fire and stand on a street corner selling them.  If you wanted to be a blacksmith, you just learned from an existing blacksmith and then set up your own shop.  You could open a bank if you wanted to.  All you needed was enough people to trust you to have you hold their money, and perhaps enough starting cash for a building and safe.

If you wanted to hire someone, you just put out a sign.  A person wanting a job could just come in and talk to the owner, then start later that day with a handshake.  If things didn’t work out the owner could fire the employee if desired.

Today there are many regulations and requirements that keep people from being able to start a business.  Would you know how to start a hot dog stand in your town?  What licenses would be required?  What paperwork do you need to fill out?  Do you need to have insurance or a post a bond in case someone chokes or just doesn’t like your hot dogs?  How do you pay sales taxes and income taxes?  If you hire someone, what paperwork is required and what benefits must you provide.

Note that most of the barriers are not financial.  If you wanted to open a whiskey distillery, you would need to post a large bond (something like $300,000) and pay a large licensing fee to local officials, but for many other businesses this is not required.  The main issue is all of the paperwork that must be filed.  There is tax paperwork, business license paperwork, and personnel paperwork.  There are also, of course, fees all along the way for someone to file the paperwork.  Good thing there is the Internet, because you’ll need it to spend hours of research about regulations and download all of the forms you’ll need (and print at your expense).  Many large businesses have whole departments to do these things, and many small business owners spend a lot of nights and weekends doing these things rather than doing their business.

This is not to say that all regulations are bad.  Certainly it is probably good to have food inspections, although the value depends on the committment of the inspector.  My father-in-law had an inspector visit him regularly just because he was near his office.  I doubt the other restaurants got as much scrutiny if any.  There is certainly a lot of paperwork that must be filed and a lot of regulations that must be understood and complied with that really don’t help anyone.

Taxes are also a barrier.  Not paying taxes as much as much as filling out the paperwork and saving all of the receipts.  This could be solved easily by enacting The Fair Tax, which replaces the income taxes and the payroll taxes with a flat sales tax.  At least this would solve the issue of needing to fill out all of the forms for personnel – but you would still need to send the money you collect for the Fair Tax to the federal government, but this should be a very short form (just sales numbers and the tax calculation).  This could easily be done online.

The pending legislation to make the seller send state sales taxes to each state and locality would be another significant issue to starting an online business.  The issue is the need to send so many checks each month – even if you only sent taxes to each state and not to each locality) and being subject to audits by each state.  The solution here is what is done currently with sales done in person – the seller collects the sales tax of the state in which the store is located and gives it to his state.  One check, one form.

The current generation can accept the status quo and see more and more regulations build each day.  They will probably not be able to start a business because it will be too difficult, being relegated to the role of a worker all of their lives.  Instead, they could begin to speak out and demand that taxes be simplified through the Fair Tax and regulations be examined and trimmed.  Established businesses that were started at the time of light regulations love to see more regulations put in place because they know it will keep out competition.  This is why they don’t complain too loudly when a new regulation is proposed – they know they can just pass the costs on to the consumer.  It is the next generation that sees a loss of opportunity.

Please contact me via vtsioriginal@yahoo.com or leave a comment.

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Disclaimer: This blog is not meant to give financial planning or tax advice.  It gives general information on investment strategy, picking stocks, and generally managing money to build wealth. It is not a solicitation to buy or sell stocks or any security. Financial planning advice should be sought from a certified financial planner, which the author is not. Tax advice should be sought from a CPA.  All investments involve risk and the reader as urged to consider risks carefully and seek the advice of experts if needed before investing.


  1. I think another burden on the young generation is student loans and the horrible educational system we have in this country.

    But I also do agree that regulations are choking the economy and the younger generation.

    • Agreed. Of course both the student loans and the educational system are a result of the parents and taxpayers not taking ownership of the schools and college systems.

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