Crushing, Hidden Tax of Federal Regulation Soars
Crushing, Hidden Tax of Federal Regulation Soars
Lawmakers Fail to Scrutinize the "10,000 Commandments" of Federal Regulations
Washington, D.C. June 3, 2009 – Federal regulations impose a whopping $1.17 trillion last year in compliance burdens on Americans, finds a new report from the Competitive Enterprise Institute. That amounts to $3,849 for each man, woman, and child in America. The Federal Register, the depository of all rules, stands at a record-high 79,435 pages.
“The U.S. economy lost value in 2008 for the first time since 1990. Meanwhile, our federal government imposed a $1.17 trillion ‘hidden tax’ on Americans beyond the $3 trillion officially budgeted,” said Wayne Crews, author of Ten Thousand Commandments: An Annual Snapshot of the Federal Regulatory State.
Federal agencies issued 3,830 rules in 2008. “The costs of federal regulations too often exceed the benefits, yet these same regulations receive little official scrutiny from Congress,” said Crews. The report urges Congress to step up and take responsibility as lawmakers to review and roll back economically harmful regulations. “Rolling back regulations would constitute the deregulatory stimulus that the U.S. economy needs,” said Crews.
Among the report’s findings:
- Federal regulations ate practically 10 percent of what the U.S. economy produced last year.
- If the regulatory state were a country, it would have world’s 15th highest GDP.
- Think you pay a lot in income tax? At $1.172 trillion, regulation approaches the level of 2008 individual income taxes of $1.2 trillion.
- Regulatory costs are equivalent to 65 percent of 2006 American corporate pretax profits combined, of $1.8 trillion.
- Regulatory costs are a huge hidden tax. Consider that the federal government spent $2.98 trillion in 2008, and businesses spent over a third of that amount on regulatory costs. Together, that’s over $4 trillion taken away by government from the sector of the economy that actually creates jobs and provides economic opportunity.
- The biggest regulations got bigger. “Economically significant” regulations – new rules that cost at least $100 million—increased by 13 percent between 2007 and 2008.
The report urges reforms to make the regulatory costs more transparent and accountable to the people, including annual “report cards” on regulatory costs and benefits, and congressional votes on significant agency rules before they become binding.