03/28/2024

Ten Thousand Commandments: An Annual Snapshot of the Federal Regulatory State

Federal regulatory burdens can operate as a hidden tax. Unlike on-budget spending, regulatory costs are largely hidden from public view. This can make regulation overly attractive to lawmakers. For example, a new government job-training initiative could involve either increased government spending or new regulations that require businesses to provide such training. Just as firms generally pass the costs of some taxes along to consumers, some regulatory compliance costs borne by businesses will find their way into the prices that consumers pay, affecting the wages that workers earn and hindering hindering growth and prosperity. The costs of such rules and mandates accumulate throughout the economy. This report is the latest in an annual series that examines the scope of the federal regulatory state.

. . . The estimate for regulatory compliance and economic effects of federal intervention is $1.9 trillion annually for purposes of comparison with federal spending and other economic metrics. This estimate was compiled using available federal government data and reports, in context with contemporary studies.

. . . If all costs of federal regulation and intervention flowed down to U.S. households, each would “pay” $14,666 annually on average in a regulatory hidden tax. That amounts to 20 percent of the average household pretax income of $74,664 and 26 percent of the average household expenditure budget of $57,311. The regulatory “tax” exceeds every item in the household budget except housing. More is “spent” on embedded regulation than on health care, food, transportation, entertainment, apparel, services, and savings.

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