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EDITORIAL: Red tape recession
Government rules are stifling economic growth
The millions of Americans who struggled over the weekend to complete their tax forms were reminded just how out of control the system has become. In the past decade, there have been more than 3,500 changes that make the tax code more complex and onerous. “One of my favorite statistics is that the tax code is four times as long as ‘War and Peace’ and only getting longer,” IRS Commissioner Douglas H. Shulman told the National Press Club on April 6.
On Monday, the Competitive Enterprise Institute (CEI) released its analysis of the federal regulatory burden, which noted that the $160 billion annual cost of complying with the tax code represents less than a 10th of the $1.75 trillion burden of complying with the rest of Washington’s red tape. About 12 percent of the nation’s entire productive output is devoted solely to appeasing bureaucratic fiat. For a small company, meeting all of the various environmental, economic and workplace-related regulations takes an estimated $10,585 out of the pocket of each employee.
The major rules adopted by agencies last year only made the situation worse. Automakers will have to redesign their vehicles to meet new gas-mileage mandates. The Energy Department put out restrictions on which clothes dryers, air conditioners, furnaces and refrigerators the public will be allowed to buy. The Department of Health and Human Services wants nutrition labeling on vending machines. The Environmental Protection Agency has more than a dozen job-killing regulations mostly related to crackpot global-warming theories.
Fewer Americans are on the job, and those that do work are earning less. The Bureau of Labor Statistics announced Friday that real wages declined 1 percent over the past 12 months. Since the 2007 peak, the number of Americans holding jobs is down 5 percent, according to the Bureau of Labor Statistics. As these numbers go down, measures of the regulatory bloat go up. The Federal Register contained 81,405 pages last year - a 26 percent increase over a decade. The number of rules that cost more than $100 million to implement increased 22 percent.
As the CEI report explained, government turns to regulations to implement public policy without having to pay for it. It’s a form of “off-budget deficit spending” imposed by unelected busybodies. One of the best ways to shrink that deficit and stimulate the economy would be to cut back on the number of bureaucratic rules and regulations.
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