Neg - Trademark Trolls - MSDI 2024

MSDI 2024 - Trademark Trolls Negative
On-Case
Economic Futures Advantage
Turn – Small business bad for the economy
Small business doesn’t cause growth—they’re relatively inefficient and sap government resources.
Atkinson 18—(*president of the Information Technology and Innovation Foundation, **visiting professor at the University of Texas Johnson School of Public Affairs). *Robert D. Atkinson & **Michael Lind. April 6, 2018. The Wall Street Journal. . Accessed 8/26/21.
In our age of political polarization, the right, left and center agree on one thing: Big business is wicked, and small business is noble. President Donald Trump has declared: “We’re going to create an environment for small business like we haven’t had in many, many decades!” His enthusiasm echoes his predecessor, President Barack Obama, who claimed that “small businesses are the backbone of our economy and the cornerstones of America’s promise.” Indeed, politicians and pundits of every stripe argue that we can solve a host of problems, from creating jobs to boosting productivity to unleashing innovation, with hefty doses of the same miracle cure: aid to small business. But this alleged miracle cure is really snake oil. That is because, compared to large firms, small firms pay lower wages and provide fewer benefits, injure and lay off their workers more frequently, spend less to protect the environment, are less productive and less innovative, and create a smaller share of net new jobs. After World War II, as big firms emerged in industry after industry (hotels, banks, restaurants, retail), small firms began to cast themselves as victims and to ask public officials for relief. In 1953, Congress established the Small Business Administration to “aid, counsel, assist and protect, insofar as is possible, the interests of small business concerns.” But fairness was a relatively weak reed on which to build an elaborately discriminatory economic policy. What was needed was a positive rationale for giving preferential treatment to small businesses. Job creation became the new banner. Economist David Birch of the Massachusetts Institute of Technology claimed in the late 1970s—inaccurately, as it turned out—that small businesses were the jobs engine of the economy, which allowed advocates to argue that aid to small businesses was a driver of economic growth. This narrative was reinforced by the wave of startups in the tech sector in the 1980s and 1990s. By 2000, all new businesses, no matter how technologically primitive or undercapitalized, were being called startups. A new biotech company was a startup, but so was a new three-person lawn-mowing business. Only child-labor laws prevented lemonade stands from being classified as startups, too. As a result, firms with fewer than 11 employees are exempt from most workplace safety requirements. The Family and Medical Leave Act does not apply to small firms, and many civil rights laws contain exemptions for small firms. A firm with fewer than 20 employees can legally discriminate against workers on the basis of age; if it has fewer than 15 employees, it can discriminate against qualified individuals with disabilities. Only federal contractors with 50 or more workers are required to use affirmative action plans when hiring. The tax code also lavishes benefits on small firms. Profits from publicly traded companies (most of which are large) are typically taxed twice, once at the corporate level and again when shareholders accrue capital gains or dividends. By contrast, pass-through firms such as sole proprietorships, partnerships and LLCs—the lion’s share of which are small—are taxed only once, on the owners’ incomes. In addition, many tax incentives either apply only to small firms or are more generous for small firms, including (at least before recent tax-reform legislation) the ability to expense investments in new equipment, exemptions from imputed interest obligations, completed-contract rules, expensing of agricultural costs and a host of others. To give small businesses a leg up, federal agencies are required to buy goods and services from them even when their prices are higher. Federal agencies also provide a variety of special subsidies to small firms. Small firms get discounts when buying rights to use the radio spectrum and pay lower patent fees. And they get cut-rate financing, too. In 2016, the SBA supported loans to small businesses across the nation: $105 million for car dealers, $118 million for residential building construction, $312 million for liquor stores, $742 million for gas stations and $760 million for dentists. Advocates for small businesses often argue that such firms deserve special breaks because it is harder for them to bear the costs of complying with government regulation. After all, every firm must devote time and resources to filling out a given form, and big firms have the advantage of spreading those costs over a larger business. There’s some validity to this point. But most special favors for small businesses—lower tax rates, tax incentives, direct subsidies, cheap financing—have nothing to do with their difficulty in coping with regulation. And requiring small firms not to discriminate on the basis of age, gender, race or religion imposes no special regulatory burden. Some regulations do, in fact, create a competitive disadvantage for small firms. But why shouldn’t big firms enjoy lower costs from economies of scale in complying with regulations? If small businesses cannot handle the costs of regulation—or any other business cost for that matter—they must choose between growing to a more efficient size or losing market share. Government at every level can certainly do more to eliminate unnecessary regulations and to streamline those regulations that serve crucial public ends. But such reforms should benefit all businesses, regardless of size. Don’t all the breaks for small businesses at least help “the little guy”? No, in fact, they go mostly to the wealthy. In 2016, according to the nonpartisan Tax Policy Center, the top 1% of pass-through businesses earned 50.8% of the income for such firms. A mere 13.4% of all pass-through income went to the bottom 60%. A 2015 study by the Federal Reserve Bank of New York concluded, “More wealthy individuals are small-business owners than poor individuals. The subsidy on small-business ownership just transfers resources to the wealthy from the poor.” Beyond the injustice of it, small-business favoritism reverberates throughout the economy, slowing growth in two ways. First, subsidies and other size-based industrial policies slow productivity growth by enabling less efficient small firms to gain more market share than would otherwise be the case. Second, discriminatory policies provide an incentive for small firms to remain small. Why add five more workers when doing so would subject you to a host of new regulations and restrict your access to government handouts? Today, with the U.S. economy facing intense global economic competition and suffering from stagnant productivity and sluggish wage growth, we can no longer afford the luxury of tilting the economic playing field toward small business owners. To end the misallocation of resources caused by small-business cronyism, public policy should be guided by the principle of size neutrality. Policymakers should repeal virtually all special preferences for small business in the tax code and in government procurement policy and eliminate targeted subsidies, regulatory exemptions and exemptions from civil rights laws.
Small Businesses – Growing Now
Uniqueness and Alt Cause – Small businesses growing now unrelated to trademark rules
Greg Rosalsky (writer and reporter at NPR's Planet Money; He earned a master's degree at Princeton University's Woodrow Wilson School, where he studied economics and public policy) “America's startup boom is still going strong. Here's what it means for the economy” July 2nd, 2024 Accessed: 07/04/2024 https://www.npr.org/sections/planet-money/2024/07/02/g-s1-7139/economy-startup-boom-america-productivity
Back in 2020, when the world was navigating the hellscape of the COVID-19 pandemic, economist John Haltiwanger discovered something really strange happening in the U.S. economy: Americans were creating new businesses at a record rate. Haltiwanger is one of the top experts on new business creation in the United States. He even helped the U.S. Census Bureau set up official statistics that track it. A surge in new businesses, Haltiwanger says, tends to be a great sign for job creation, innovation and productivity growth in the economy. But, up until 2020, the data painted a sort of gloomy picture. Haltiwanger was writing research papers with titles like "Top Ten Signs of Declining Business Dynamism and Entrepreneurship in the U.S." And so, in the summer of 2020, when Haltiwanger first saw the data suggesting there was a startup boom, he and his colleagues were gobsmacked. "At first we thought, 'There's got to be something wrong,'" Haltiwanger says. By November 2020, when I first spoke to Haltiwanger for the Planet Money newsletter, it was clear that the startup boom was real. But it was unclear whether the surge in new businesses was just a pandemic-related blip that would quickly fizzle out. Much of the boom could be seen in the online retail sector. But then the startup boom kept … well, booming. We saw a second surge of new businesses beginning in 2021. So I spoke to Haltiwanger again in June of that year. By then, he was more optimistic that the surge of new businesses was a harbinger of great things to come for the economy. He was particularly struck by the revolutionary changes to business life created by widespread remote work. But, to be honest, I was still a bit cynical about the boom. Lots of small businesses were devastated by the pandemic and closed up shop. Many people lost their jobs. Maybe a lot of them were creating new businesses in a desperate attempt to pay the bills or to get more federal relief money, or just out of boredom. Most plausible to me: Maybe this surge in new businesses was just a reflection of the wild swing that we had been on to a weird pandemic-related economy and then back to normal again. The first swing created one-off business opportunities, like selling hand sanitizer or masks, or delivering cheeseburgers and fitness equipment to our front doors, or whatever. Then, as we swung back to normal and consumers began spending money outside again, that created new opportunities for the revival of face-to-face businesses, like bars, gyms and restaurants. These were the same types of businesses that had been devastated by the pandemic. Maybe, I figured, this was all just one long, arduous journey that ultimately brought us back to where we began, with limited long-term benefits for the economy. But we're now well past the pandemic crisis and even the pandemic recovery. It has been almost exactly four years since the startup boom began — and there's still a bonanza of new business creation in the United States. It's harder to be dismissive about it. "I'd say we're on a new plateau that started in 2021," Haltiwanger says. Comparing the three years before the onset of the pandemic with the three years after it, the data suggests there are now, on average, almost 60% more new businesses being created each year. The boom is real. It's sustained. It's visible in both businesses that are just a single person striking out on their own and, importantly, businesses that are likely to grow and employ people. It's seen in traditionally underrepresented minority communities. And, Haltiwanger says, this boom could be a sign that something fantastic is about to happen to the American economy: a long-awaited boost in productivity growth, which is the magic sauce for making society richer.
Small Businesses – Not key to the economy
Small businesses aren’t key to job creation---the data is out of context
Tzanetos 21, Financial Adviser, Writer for GoBankingRates, “What Do Small Businesses Really Mean for the US Economy?,” 6-23-21, https://www.gobankingrates.com/money/economy/what-do-small-businesses-really-mean-for-us-economy/
Small businesses have long been touted as America’s backbone and the main pillar of its economy. Almost every president in recent memory has campaigned on the importance of their survival, and the IRS has allowed them tax allowances and leeway that larger institutions are rarely afforded. However, recent studies have shown that small businesses are not the job generators they might have thought to have once been. According to the U.S. Small Business Administration, small businesses create over 66% of net new jobs. A new report also shows that small businesses account for 44% of total U.S. economic activity. Although this number has declined gradually in recent years, it still remains a significant portion of overall GDP contribution. The drop in GDP share small businesses contribute to while maintaining the majority of net new job sourcing is of particular importance. According to the USSBA, from 1998 to 2014, the small business share of GDP has fallen from 48% to 43.5%. Yet, over the same period, the amount of small business GDP has grown about 25%, at a rate of about 1.4% annually. They add that real GDP for large businesses has grown faster however, at 2.5% annually. So how does a sector that has decreasing importance on total GDP still account for 99.9% of all businesses in the United States? As with all economic data, context is key. The numbers cited by the SBA are from numbers accumulated up until 2014. A 2015 study by the Kauffman Foundation found that new businesses, not necessarily just small ones, account for virtually all new job creation in the United States and nearly 20% of gross job creation. In other words, startups spur greater job growth than larger companies. Another study by American Express and Dun & Bradstreet showed that mid-size firms (those with revenue between $10 million and $1 billion) were responsible for 92% of the net new job creation from 2008 through the end of 2014. This shows that SBA numbers and independent studies demonstrate conflicting figures as to who generates the majority of new jobs. One of the reasons behind this could be the “stickiness” of jobs per firm size, or the net vs. gross job creation. While startups and younger firms are very efficient at creating new jobs and quickly, they are also just as efficient at destroying them. Another Kauffman Foundation study in 2010 found that all net job growth comes from firms less than one year old. They add that the problem is that these firms also destroy jobs, as many go out of business soon after they open. Economist Johnathan Leonard told MIT Press that the largely ignored pattern is that “small establishments account for most net job loss just as surely as they account for most net job gain.” That’s to say that the SBA’s numbers are not necessarily wrong, but they do not offer the entire context. To sum it up: Small businesses create a lot of jobs, but they also destroy a lot of them too and people aren’t taking notice. In fact, the SBA themselves found in 2012 that just one-third of new businesses survive to their tenth year. That means that the majority of the small businesses that were job-churners in their early days, end up being lay-off machines and “net zero” employers in the end. So while it may be true that small businesses largely contribute to the amount of new jobs each year, overall they might not have as much of an impact on real job growth.
Small business is terrible at job creation.
Robert Atkinson & Michael Lind 18, Mr. Atkinson is the president of the Information Technology and Innovation Foundation. Mr. Lind is a visiting professor at the University of Texas Johnson School of Public Affairs, “Has Big Business Gotten Too Big?,” Big Is Beautiful: Debunking the Myth of Small Business, MIT Press, 2018, pp 248-278
Jobs
When all else fails, the fallback position of small business advocates is that ending small business affirmative action would mean fewer jobs. This is how many small business defenders justify these policies. The SBA states, “Because small businesses are responsible for most of the job creation and technical innovations in the United States, Congress and the president have shown great interest in encouraging the growth and health of small businesses throughout the American economy.”67 The Congressional Budget Office writes, “Policies designed to prevent discrimination or reduce pollution would probably have smaller adverse effects on employment if they exempted small firms in those cases where compliance was particularly costly for small firms.”68 Likewise, the World Bank’s International Finance Corporation writes that the strategy of promoting small- and medium-scale enterprises rests on the recognition that these enterprises constitute the largest part of the private sector in developing countries, in terms of employment. … For this reason, one of the cornerstones of the World Bank strategy for promoting small- and medium-scale enterprises is to “level the playing field;” that is, to create a business environment that gives equal opportunities to entrepreneurs of all sizes.69 Even business leaders fall into this trap. Lloyd Blankfein, Michael Bloomberg, Warren Buffett, and Michael Porter write, “How can we increase the speed of job creation? A critical part of the answer lies with America’s small businesses.”70 But as we showed in chapter 6, small business is not the source of most net new jobs, big firms are. However, even if they were, job creation is a function of macroeconomic policies, such as interest rates and fiscal policy, not micro policies, such as discriminatory procurement. If government treated small and large firms the same, the result would a modest shift in output and jobs to larger firms. Production doesn’t vanish; it moves to larger firms, which would expand employment to produce the output needed to serve consumer demand. While they would not in the first order create as many jobs to fulfill that demand (because they are more productive), they would also charge lower prices or provide higher wages. Because that money (consumer savings and worker wages) is not buried in the backyard but is spent on new consumption, that in turn creates more jobs. In other words, employment levels are completely unrelated to firm size. In summary, if a business is so fragile and unsuccessful that it can’t comply with sensible laws, pay its fair share of taxes, and survive without special treatment from government, then maybe it should die. A Policy Agenda for Size Neutrality The policy implications of this analysis are simple and clear: governments, as well as multilateral institutions like the World Bank, should embrace size neutrality and end most programs and policies designed to favor small business over large. In railing against the purported pernicious influence of big business on Washington, House Speaker Paul Ryan said, “The government does not have a stake in the fight between David and Goliath—our only concern is to make certain that it is a fair fight.”71 With that we agree. The best place to start to establish that fair fight is to end pervasive small business cronyism. The point is not to favor big business. It’s to let market forces and consumer choice be the deciding factors in any economy’s firm size structure. We discuss exactly how to implement that size neutral agenda in the next chapter. The politics of ending small business affirmative action are not easy. Despite the benefits to workers large firms provide, most Democrats still assume that the interests of the proletariat workers and petit bourgeois small business owners are aligned against capitalist corporations. Moreover, exempting small business from regulations makes it easier for Democrats to get support for expanding the regulatory state. 

Preview shortened. Download the file for the full document.