- The Washington Times - Friday, June 16, 2000

Today, June 16, the average American worker finally begins to work for himself. According to the "Cost of Government Day Report: 2000" by Americans for Tax Reform (ATR), the average worker will have spent the first 167 days of 2000 "earn[ing] enough gross income to pay off his or her federal, state and local government-imposed financial obligations," which include total spending and the cost of regulation.

By incorporating estimates of government-imposed regulations, the recent ATR study represents a valuable supplement to the Tax Foundation's annual calculation of Tax Freedom Day, the day of the year before which all income for the average worker was confiscated by the various levels of government in the form of taxes. This year Tax Freedom Day was May 3, a record. ATR calculates a Spending Freedom Day (taxes plus borrowings, a sum that is especially meaningful when government's cumulative budgets are in deficit). Spending Freedom Day was April 29. To total government spending ATR adds a conservative estimate of regulatory costs. It is this sum that represents the true cost of government, and for this year ATR calculates the total cost of government to be $3,860 billion ($2,750 billion in government spending plus $1,109 billion in regulatory costs). The total cost of government this year comprises 45.4 percent of net national product ($8,505 billion).

At $1.1 trillion in 2000, regulatory costs are equal to 40 percent of total government spending. In effect, they represent a 40 percent government-imposed surcharge above and beyond mandatory taxes. This hidden tax equals more than $10,000 per American family and more than $4,000 for each man, woman and child in the nation. Moreover, the conservatively estimated $1.1 trillion in annual regulatory costs does not take into account the $1.5 trillion in reduced economic output each year attributed to federal regulations alone, according to a study by Richard Vedder, an economist at Washington University's Center for the Study of American Business. Regulatory burdens are especially onerous for small businesses, which have been responsible for creating the overwhelming majority of new jobs during the past 20 years. According to a study by the Small Business Administration, firms employing fewer than 500 workers incur regulatory, compliance and paperwork costs that average $5,000 per employee.

It is, of course, not preordained that the government should cost its citizens nearly 50 percent of their annual economic output. Congressional Republicans have demonstrated their commitment to deregulation and reduction in the other costs of government, although many of their efforts have been stymied by the White House. Voters couldn't hope for a more clear-cut choice between Al Gore and George W. Bush.

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