The cost of regulation to businesses in America is $1.75 trillion (according to a study done by the SBA’s Department of Advocacy). That is $1.75 trillion in costs to businesses, which end up in prices paid by consumers. In other words, to fund compliance with regulations, American consumers pay an additional $1.75 trillion for the goods and services they buy.
This is a hidden tax on every consumer. The poorest of the poor are paying it when they purchase something. There’s no refund or a way to avoid it.
In addition, not included in the $1.75 trillion price tag, is the direct tax dollars spent on the bureaucracies that enforce these regulations. The budget for them does not come out of compliance costs to companies, it comes from the taxpayer. So, while everyone pays the $1.75 trillion in a tax hidden in the price of goods and services, the 50% of people in the country that pay taxes also pay for the privilege of supporting the bureaucracies responsible for hiding that tax in the prices.
Does this $1.75 trillion paid in compliance actually add to wealth and prosperity? Freeing that $1.75 trillion for other purposes would enable it to be used in ways that are actually productive, ways in which it produces more wealth, not more forms being properly filled out.
Again, there are useful regulations and there would inevitably be some cost of compliance. However, it is difficult to believe that by eliminating redundancy, simplifying procedures, and trimming away the useless regulations, we could not trim the compliance costs by at least half and return nearly $900 billion into the economy to be used in productive ways, not the least of which could be simply lowering prices and giving the consumer some extra jingle in his pocket to be spent on other things or saved.
$1.75 trillion pulled out of the economy every year (and rising). Seems like a lot of money to me. Does the benefit justify that cost? What cost does justify the benefit? More importantly, what is the benefit? Washington simply does not do cost/benefit analysis. They just have good ideas and we pay for them. Rich, middle class, and poor. Again I ask, who is harmed the most (answer, in case you’re a Democrat and have never considered such things, the poor and middle class are harmed the most by this hidden tax resulting from the good ideas of big government elites).