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Thursday, July 10, 2008

Federal Regulatory Costs

As is the case with government spending, federal regulatory costs just keep mounting ever higher. That’s clear in the latest edition of the Competitive Enterprise Institute’s “Ten Thousand Commandments: An Annual Snapshot of the Federal Regulatory State” written by Clyde Wayne Crews.

Among the findings:

• Given that 2007 government spending reached $2.73 trillion, the hidden tax of regulation now approaches half the level of federal spending itself.

• Regulation costs more than seven times the $163 billion budget deficit.

• Regulations cost about as much as U.S. corporations earn in pre-tax profits ($1.16 trillion versus $1.3 trillion, respectively).

• Regulations cost about as much as individual income tax collections ($1.16 trillion versus 1.17 trillion, respectively).

• “Economically significant” regulations – new rules that cost at least $100 million -- increased by 14 percent between 2006 and 2007, from 139 to 159.

The need for deregulation and general regulatory reform are clear. Unfortunately, we hear little about such issues from Congress or on the campaign trail. But make no mistake, these mounting regulatory costs take a very real toll on entrepreneurship, investment, job creation, and the economy in general.

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