Stossel: NY Strangles Small Business

Kamal Saleh runs a small store in New York City. He was recently given a summons to appear in court for violating one of New York's many rules. His crime was selling cigars... 11 cents too cheaply.

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It's not often people complain about things being too cheap. But New York City says stores may not sell tobacco below a certain price.

"Very cheap products should no longer be available. It deters children from starting smoking," says Dr. Kurt Ribisl, who studies tobacco policy and testified at the New York hearings in favor of the tobacco price floor. "Cigarettes are the most lethal product ever introduced into interstate commerce."

John Stossel agrees cigarettes are dangerous. But he asks Dr. Ribisl, "shouldn't individuals have the right to decide for themselves if they want to smoke? And what is the cost to New York City businesses in complying with all these regulations?" For tobacco alone, the regulations are 47 pages long.

Saleh faces a $2000 fine, a huge amount of money for a small store owner. "You have to sell a lot of sodas and sandwiches in order to make the $2000" says Andrew Tilem, Saleh's lawyer. Tilem represents a lot of small businesses in New York and says all the regulations hurt them. "It's the big guy who basically can hire lawyers. It's the little guy who's trying to pinch his pennies to make a dollar that has the biggest problem."

Tilem says small stores are constantly going in and out of business, but "the big business community is thriving. You see Starbucks. You see 7-Eleven. You see Target, opening new stores."

John Stossel asks if New York has become a city of so much regulation where only big businesses can thrive?

Produced by Naomi Brockwell. Edited by Joshua Swain.