Washington, DC, May 9, 2000 – As last minute filers rushed to finish their taxes and write their checks to the government recently, Congress and the White House were negotiating over the federal budget. Seldom heard in the news, though, is that the average American pays more in taxes than just that annual check to the IRS. In fact, the annual cost of regulations is about $7500 for the median two-earner family.
A just-released report from the Competitive Enterprise Institute, Ten Thousand Commandments: An Annual Policymaker’s Snapshot of the Federal Regulatory State, 2000 Edition, notes that federal, health, safety, environmental and economic regulations can add a hidden $758 billion to official on-budget costs every year. While that enormous amount would absorb 19 percent of this year’s forecast gross domestic product, even that only tells part of the picture.
These regulatory compliance costs are the hidden taxes, the off-budget government that will goes unacknowledged during tax time.
“The $700 billion in regulatory costs that the federal budget glosses over exceeds Canada’s entire GNP, which was $595 billion in 1997,” noted Wayne Crews, Director of Competition and Regulatory Policy at CEI. “The 1999 Federal Register is the largest it has been since Jimmy Carter was president. When the Clinton/Gore Administration talks about ‘reinventing government,’ it surely doesn’t mean making it smaller.”
In 1999, 4,538 new rules and regulations were at various stages of implementation. Of these, 137 were acknowledged to be “economically significant,” meaning they will have annual economic impacts of over $100 million each. The number of economically significant rules increased 17 percent over the prior year’s 117.
“Small businesses are particularly at risk in the face of off-budget government. Of the 4,538 new rules, 963 are expected by agencies to have notable impacts on small businesses, who, while arguably the economic engines upon which much of America’s prosperity depends, are less able to shoulder heavy regulatory burdens,” commented Crews.
“At the very least, future federal budgets need to acknowledge and document the ‘off-budget’ costs of regulation. Only then will Americans have the real truth about the federal government’s reach in their lives,” Crews concluded.
CEI, a non-profit, non-partisan public policy group founded in 1984, is dedicated to the principles of free enterprise and limited government. For more information, please contact Emily McGee, director of media relations, at 202-331-1010, ext. 209.