Red Tape Is The Unsexy Everything Tax Threatening Democracy

While we don’t usually complain about taxes we don’t see at the end of a food or clothes receipt, the hidden cost of government red tape makes everything more expensive. And the bureaucracy that exponentially grows red tape threatens democracy because in many case it’s created by government workers who aren’t elected by the people. That’s how bubbles get created like the one that Donald Trump popped last year.

Each year, the Competitive Enterprise Institute (CEI), where I served as the 2015 Warren Brookes Journalism Fellow, releases its annual Ten Thousand Commandments report that spotlights this hidden tax on everything.

From CEI’s Wayne Crews in the Ten Thousand Commandments 2017 report:

• “Federal regulation is a hidden tax that amounts to $15,000 ($14,809) per U.S. household each year or 21% of the average household income. More is “spent” on embedded regulation than on health care, food, transportation, entertainment, clothing and education.
• The burden of federal regulations cost American consumers, businesses and the economy an estimated$1.963 trillion in 2016. If the cost of federal regulations were a country, it would be the 7^th largest, behind India and ahead of Italy.
• Crews underscores the need for more transparency, a better review process and more cost-benefit analyses for new and current federal regulations. In 2016, Washington bureaucrats issued 18 regulations for every 1 law Congress enacted. Washington must be held accountable for the burden they impose on Americans and the economy.
• In the report, Crews analyzes President Obama’s final year in office, and finds a significant regulatory surge. This jump in major regulations has set a benchmark by which the Trump administration will be compared. Trump has promised to slam the brakes on overregulation.
• Usually, regulatory costs get little attention in policy debates, because unlike taxes, they are difficult to quantify, oftentimes unbudgeted, and almost always indirect. However, there is renewed bipartisan interest in cutting red tape in the 115^th Congress.
• The number of Federal Register pages in 2016 was 95,894, or 19 percent higher than the previous year. This page count was President Obama’s highest level, as well as the highest level in the history of the Federal Register.
• Final rules in 2016 increased from 3,410 to 3,853, the highest total during the Obama administration, and the highest since 2005.”

While it’s definitely important to protect consumers, we consumers and taxpayers also have the right to protect ourselves from the unintended consequences of red tape. This red tape hurts middle class and poor families the most–they’re greater consumers (rather than investors) as a share of their household income. Cheers to CEI for standing up for the little guy, yet again.

Photo by Department for Communities and Local Government