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10,000 Commandments — The Hidden Tax
When the Competitive Enterprise Institute (CEI) announced the conclusions of its annual “Ten Thousand Commandments: An Annual Snapshot of the Federal Regulatory State” earlier this week, it came as no surprise to learn that the rules and regulations placed on the economy by illicit agencies of the "fourth branch of government" constitute an enormous burden that is largely uncounted.
What was surprising was the horrendous cost of that burden which constitutes an additional tax on the economy.
Clyde Wayne Crews, vice president of CEI and author of the annual study, said that federal regulations cost the economy more than $1 trillion last year and included more than 3,500 new regulations issued by the fourth branch agencies. In addition, the cost of running those agencies was not included in the study, but was estimated by the author to be another $54 billion. The federal government spends about $3.5 trillion a year according to the current budget. Adding in the additional costs of those “Ten Thousand Commandments” brings the price tag to nearly $5 trillion, or one-third of the country’s GDP.
Furthermore, most of those costs are borne by the industries being regulated, as well as state and local governments forced into compliance with the regulations. As Crews puts it: "Rather than pay directly and book the expense of a new initiative, [the federal government] can require that the private sector and lower-level governments pay. By regulating, the government can carry out desired programs but avoid using tax dollars to fund them."
And there is little incentive to keep those costs under control by the agencies. Crews points out that “policymakers … care [little] about the extent of regulatory costs or where those costs stand in relation to ordinary government spending. Regulatory costs are unbudgeted and … thus allow the government to direct private-sector resources … without much public fuss. In that sense, regulation can be thought of as off-budget taxation.”
The report estimates that nearly 60,000 rules have been issued by these agencies since 1995. And, in addition to the 3,500 rules promulgated this past year, another 4,000 rules are pending. Given the enormous growth of government under the Obama administration so far, it seems reasonable to assume that more (and more onerous) rules can be expected in the years to come.
Read more: The New American