| Chapter 1: | The Chain Store Historically Considered |
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A modern study of the chain store tax unveiled some important insights into the movement. Professor Thomas Ross describes the political economy of the chain tax movement across the states. His study carefully describes some of the anomalies of the political conditions. He especially notes that it is apparent that, in many instances, the laws passed by the legislature were purposefully unconstitutional. They were for political show and nothing more. This argument, which is clearly within the framework of the economic theory of regulation, describes how self-interested politicians use political activity to maximize their support. I revisit his argument later in a more modern context.
Ross (1986) describes the chain store tax as an effective mechanism for politicians to garner support. Intriguingly, he questions the high failure rate of anti-chain store regulation in the courts. His empirical model was designed to answer the questions:
Ross further cites Virginia, in which both the Senate and Assembly passed laws, with the Senate’s mirroring one already struck down. The Senate, despite a vote to withdraw from the Assembly and Conference committee, failed to withdraw the legislation, and it failed to pass in a common form that could be brought to the governor for signature.
Ross tested the relationship between the introduction or passage of a law and state-level conditions that might support its passage. The empirical model tested (a) the decision to pass a bill, (b) pass one that survived court scrutiny, and (c) failure to pass a bill.