RSS Feed LinkTwitter Profile LinkFacebook Profile LinkYouTube Profile Link

Time to Tackle the Hidden Tax of Regulation

by Human Events (click here for more by this author)

Republicans are hitting President Obama on his idiotic call for tax hikes as well as his avaricious appetite for increased government spending, as they should.  But here’s a new target for them: The hidden tax of regulation.

A new report from the Competitive Enterprise Institute (CEI) titled “Ten Thousand Commandments” reveals the vast amount of private-sector capital drowned in the sea of government regulations.

The report’s conclusion is mind-boggling.  The cost of complying with federal regulations has hit the $1.7 trillion dollar mark.

That’s trillion, with a T.

To put that number in perspective, it’s larger than the President’s own anticipated 2011 budget deficit of $1.6 trillion.  In fact, the current regulatory burden imposed on businesses across America now amounts to 50% of total government spending in one year alone.

That’s nuts!

But guess what?  We can top it.

As the CEI report underscores, the compliance cost of regulation is larger than all corporate pretax profits in 2008 and dwarfs the estimated 2010 individual income tax receipts by nearly 50%.

That last point is worth repeating:  The cost of abiding by all the government regulations tallies up to $1.7 trillion, which towers over the revenue brought in by all income taxes, in every bracket.

We can also add that the compliance costs amount to more than $8,000 per American employee, but we’ll have to stop the comparisons there or else this editorial would rival Atlas Shrugged in length—but with statistics.  Yikes!

So every time you hear some Democrat bemoan the ill-informed view that America is an underregulated society, tell them to put the above numbers in a pipe and smoke them.

Seriously.  America is hamstrung by onerous regulation.  That anyone can say otherwise defies belief.  CEI notes that the Federal Register, which spells out all the government’s proposed and confirmed regulations, runs practically 25,000 pages—an increase of 26% over the last decade.

And thousands more rules are being proposed each year.

A true “stimulus” to the economy would be to relax much of these regulations and allow entrepreneurs and business owners to spend their capital on expansion and product innovation, rather than conforming to the obligations of some bureaucratic scheme.  That’s not to say scrap all federal oversight, but the way things operate now, agencies are encouraged to brainstorm new policies without taking into account how they would negatively impact the economy.

It’s worth noting how the report “Ten Thousand Commandments” explains such perversity:

“Agencies face overwhelming incentives to expand their turf by regulating, even in the absence of demonstrated need, because the only measure of agency productivity—other than growth in their budgets and number of employees—is the number of regulations they produce.”

One step Congress can take immediately—and Republicans should adopt—is to arrest the power of unelected bureaucrats to codify these “commandments” in the first place.  We can’t hold the troglodytes in the Environmental Protection Agency accountable for the laws they devise.  But we can hold politicians accountable, which is why any proposed regulation by any federal agency that has any direct or indirect economic blow must be approved by Congress.

Sort of like, of the people, by the people.


HUMAN EVENTS is the news source President Reagan called his “favorite newspaper” and we still hold high the Reaganesque principles of free enterprise, limited government and, above all, a staunch, unwavering defense of American freedom.

You can also follow Human Events on FACEBOOK.

Click Here to Become a Fan:

Leave a Reply